Icahn bought $51 million in Fannie, Freddie shares - filing

NEW YORK Tue Jun 3, 2014 1:20pm EDT

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014. REUTERS/Brendan McDermid

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Activist investor Carl Icahn acquired about $51 million in the common shares of mortgage financiers Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) from mutual fund manager Fairholme Funds Inc in March, a court filing showed on Tuesday.

Icahn, a billionaire investor known for taking big stakes in companies and pushing for management change, bought 6.8 million common shares of Fannie Mae and 5.7 million common shares of Freddie Mac from Fairholme, according to the filing with the U.S. Court of Federal Claims in Washington.

Icahn is the latest high-profile investor to bet on the companies, which are operating under conservatorship while Congress considers an overhaul of the mortgage finance system. The companies own or guarantee about 60 percent of all U.S. home loans.

Icahn was not immediately available for comment by phone.

Activist investor Bill Ackman's Pershing Square hedge fund invested half a billion dollars to acquire stakes of nearly 10 percent each in Freddie Mac and Fannie Mae, regulatory filings showed in November. Ackman said at an investment conference last month that shares of Fannie Mae could be worth as much as $47 a share.

The companies' shares rose in the wake of reports of Icahn's purchases. Fannie Mae (FNMA.OB) shares last traded up 2.03 percent at $4.53 per share, while Freddie Mac (FMCC.OB) shares were last up 1.8 percent to trade at $4.52 per share.

Regulators took control of Fannie and Freddie in 2008 after losses stemming from subprime mortgage investments pushed them to the brink of insolvency. The Senate is considering taking action to wind down the two taxpayer-owned companies, but the measure faces an uncertain future.

Fannie and Freddie's newfound health has prompted some investors to snap up their stock in a bet the companies will be made private in the future.

As of March 31, Fairholme owned a 1.65 percent stake in Fannie Mae and a 2.64 percent stake in Freddie Mac, according to Thomson Reuters data. Mutual fund manager Bruce Berkowitz is the founder of Fairholme Capital Management.

Last year, Fairholme sued the U.S. government, claiming that changes to the bailout terms set for Fannie Mae and Freddie Mac unlawfully impair shareholder value.

Fannie Mae and Freddie Mac posted profits of $5.3 billion and $4.0 billion respectively for the three months ended March 31.

(Reporting by Sam Forgione; Editing by James Dalgleish, Dan Grebler and Jonathan Oatis)

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