Carl Icahn Further Boosts Stake In Nuance Communications Despite Poison Pill

(RTTNews) - Billionaire and activist investor Carl Icahn revealed Thursday in a regulatory filing that he has raised his beneficial ownership in speech-recognition software maker Nuance Communications, Inc. (NUAN), which may be an attempt to seek board seats for himself and his nominees.

Burlington, Massachusetts-based Nuance had on August 20 adopted a 'poison pill' in the form of a shareholder rights plan. However, the company then noted that the rights plan was not adopted in response to any current effort to acquire control of Nuance. The rights plan came into effect today.

Meanwhile, the Federal Trade Commission has reportedly today granted Icahn an approval for a transaction related to Nuance. The details of the approval is currently not known.

The poison pill was put in place after Icahn boosted his beneficial ownership in Nuance to 16.03 percent earlier in the month. Icahn had revealed in April that he has taken a 9.27 percent stake in Nuance.

Icahn is known to amass stakes in firms that he sees as undervalued and poorly managed in order to push for management changes and seats on the company's board of directors for himself and his nominees.

The rights plan will be exercisable only if a person or group acquires 20 percent or more of Nuance's common stock in a transaction not approved by Nuance's board of directors.

The shareholder rights plan, when exercised, will see each right entitle stockholders to buy one one-thousandth of a share of a new series of participating preferred stock at an exercise price of $87.00 per right. The Rights Plan expires a year from now on August 19, 2014.

According to today's filing with the U.S. Securities and Exchange Commission on schedule 13D, Icahn may be deemed to be the beneficial owner of a total of 52.44 million shares in Nuance at a total purchase price of about $994.9 million. The ownership represents about 16.90 percent of Nuance's outstanding shares.

If Icahn is successful is gaining control of Nuance, he could force the company to divest a part of itself or even the entire company, with possible suitors being Apple, Inc. (AAPL), Google, Inc. (GOOG) and Microsoft Corp. (MSFT). Meanwhile, Apple could be the most benefited by a deal as it already uses Nuance's speech recognition technology in iPhones as part of its Siri voice recognition app.

Other possible suitors could include International Business Machines Corp. (IBM) and Oracle Corp. (ORCL).

NUAN closed Thursday's regular trading session at $18.31, down $0.19 or 1.03% on a volume of 6.16 million shares. However, the stock pared the losses by gaining $0.20 or 1.09% in after-hours trading.