Icahn, Ackman Bury Hatchet

Apr 29 2014 | 4:10pm ET

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.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.