XO's minority shareholders had their day in court, but last night word emerged that the injunction they had been seeking against majority owner Carl Icahn's intended purchase of the remainder of the company had been denied. The billionaire's ACF Industries and XO wasted no time, and at 4:45pm today they closed the deal at $1.40 per share as promised. XO is now privately held, and has filed its notice of de-listing with the SEC. So now what?
Well, minority shareholders still have more days in court - but will be seeking financial penalties now rather than a rollback of the past few years of deeds. Indeed, it is the fact that such remedies are available that probably led to the denial - it was already probably far too late to turn back the clock anyway so why should the judge intervene now? Exactly how the lawsuits turn out in the end is still anybody's guess.
But what this does is hopefully divorce the complaints against Icahn from the actual operations of the company. That will be welcome news to employees, who certainly must be glad this season of the soap opera is over. It was a black cloud completely beyond their control that just hung over everything and distorted everything from public perception to cash management.
The question is, what does XO do operationally now? Actually, we probably won't hear much. XO never said much more than the minimum required as a public company, and as a private company that isn't likely to change. That is, unless Icahn now properly funds the company, hires a CEO that knows how to make money off of fiber, and gives him the freedom to do it right. That would really shake things up, but Icahn has shown no interest in doing that thus far.
As for the mid-term future, it seems clear that Icahn won't be flipping this asset for at least 365 days, i.e. until he doesn't have to give any of the proceeds to minority shareholders according to the deal terms and he has time to properly separate the tax assets he has fought so hard for. But one year is nothing, this company has been in a holding pattern for half a decade now. Unless Icahn decides to put a pile of money in and start buying other fiber assets, XO's future still seems likely to end in a sale - probably in late 2012. But that also, is probably not too upsetting to employees - a year and a half's job security in times like these is perhaps as much as one can hope for.
Investors hopefully have learned something here though. Never put your money somewhere just because a very smart billionaire corporate raider did. Just don't.
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