For a decade, William Ackman and Carl Icahn have been enmeshed in one of Wall Street’s nastiest, bitterest and, at times, entertaining feuds. But the dispute, which intensified over the past year-and-a-half as the two battled over nutritional supplements company Herbalife, is at an end.
Ackman, who runs Pershing Square Capital Management, and Icahn patched things up last year with a phone call. The younger hedge fund manager telephoned Icahn’s assistant on April 24 with a simple message: “I am calling to forgive Carl,” The Wall Street Journal reports. Icahn called Ackman back to reciprocate. “It is a blessing to forgive, and I forgive you,” Icahn said.
The dispute dates back to 2004, and a bitter seven-year court battle over just $4.5 million. A year earlier, Ackman had called Icahn, whom he had never previously met, in an effort to sell his shares of Hallwood Realty. The two struck a deal that gave Ackman the right to share in any profit over a 10% return, but when Icahn refused to pay, things got litigious. Relations between the two men became so fraught that the management of a high-end restaurant favored by both knew to keep them apart in the dining room.
Ackman eventually won that court battle in 2011. But the dispute really didn’t heat up until the following year, when Ackman announced a $1 billion short against Herbalife—and Icahn poured hundreds of millions of dollars into the company on the long side.
At the beginning of last year, the two spent 30 minutes hurling insults at one another on CNBC. Ackman called Icahn a “bully” who “takes advantage of little people.” Icahn shot back that Ackman is a “liar” and “like the crybaby in the schoolyard.”
While it was Ackman who initiated Thursday’s 30 minute conversation, Icahn offered an olive branch last week. Appearing on—what else?—CNBC, Icahn praised Ackman’s partnership with Valeant Pharmaceuticals International on a bid for Allergan Inc. “I never said he’s not smart guy,” Icahn said. “I hope it works out better for him than Herbalife did, and I think it will…. I never thought I’d be here defending Ackman.”
The two have “agreed to disagree” on Herbalife as part of their rapprochement. “Ackman and I both strongly believe in the need for corporate governance. So what is the point in fighting?” Icahn asked. Ackman raised the possibility that the two men might work together in the future.
“There is a much greater possibility that we are on the same side than the opposite,” he said.