Dallas based Blockbuster Inc. circled its wagons against corporate raider Carl C. Icahn on Monday announcing they will follow the road they’ve started by continuing investment in the online rental business and firing shots over Icahn’s demands of higher dividends.
Icahn’s demand to raise dividends to $330 million would make operations much more difficult as based on the corporate structure and falls in video rentals.
John F. Antioco, chairman and CEO of Blockbuster sent a letter to Icahn say his comments were “inaccurate and potentially misleading.”
Blockbuster is enjoying progress with the introduction of their online rental plan and the elimination of late fees. They’ve cut prices on monthly membership fees to compete with online video rental gurus at Netflix Inc. and they’ve cut costs by waiting on movie and game trade plans until next year.
The changes have increased Blockbusters active rolls in 2 years
Icahn, who controls nearly 10% of Blockbuster stock, took shots at Antioco nice compensation deal with cash and stock worth over $51 million. He also slammed Antioco for dropping the bid for Hollywood video.
Icahn raided the Kerr-McGee oil firm based in Oklahoma and forced the firm to spend $4 billion to buy back it’s stock. It landed Icahn’s firm a cool $57 million.
Antioco said he will fight back and Blockbuster will “dig in its heels” and not send out the fat dividend.
Some industry insiders say that Icahn would go away if you paid the money but others say you should give in to “greenmail”.
They also suggest this fight will go the full 15 rounds.
John Stith is a staff writer for Murdok covering technology and business.
