Carl Icahn calls Netflix’s poison pill measure ‘poor governance’
Within hours of Netflix Inc. announcing that it had adopted a “poison pill†measure to block a hostile takeover, activist investor Carl Icahn responded with a broadside calling the move “an example of poor corporate governance.â€
Icahn called Netflix’s plan -- which would trigger whenever an individual or group tried to buy 10% or more of the company -- “particularly troubling†because of its “low and discriminatory†threshold. The billionaire disclosed on Oct. 31 that he had taken a 10% stake in the video subscription company, through stock and options.
“As one of the company’s largest shareholders we are concerned about the poor corporate governance at Netflix that these and other actions reflect,†Icahn said in a statement filed Monday with the Securities and Exchange Commission.
Netflix can now use a technical maneuver to flood the market with new shares and make a takeover attempt extremely expensive.
Icahn also took issue with the subscription service staggering the terms of its directors, with one-third of members up for reelection every year. This would prevent an outside investor, seeking to wrest control of the company from its management, to propose an entirely new slate of directors.
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