(Adds dollar stake of purchase, stock prices, other details
By Sam Forgione
NEW YORK, June 3 Activist investor Carl Icahn
acquired about $51 million in the common shares of mortgage
financiers Fannie Mae and Freddie Mac 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
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 shares last traded up 2.03
percent at $4.53 per share, while Freddie Mac 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
(Reporting by Sam Forgione; Editing by James Dalgleish, Dan
Grebler and Jonathan Oatis)