What's Carl Icahn Got Up His Sleeve for 2010?

Billionaire Carl Icahn seems to be expecting something big in 2010. The former corporate raider today announced plans to sell $2 billion in new senior bonds, the first sale by his Ichan Enterprises LP (IEP) since 2005. Proceeds of the offering by Icahn Enterprises and Icahn Enterprises Finance Corp. will refinance two issues of 7.125% notes due in February 2013 and 8.125% debt due in June 2012, the New York–based company says.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% The money will cover related fees and expenses and for general corporate purposes. Because the bonds are being sold through a private placement, the maturities were not disclosed.

"The company will now have a good war chest to go out looking at other investments," KDP Advisors analyst Barbara Cappaert told Dow Jones Newswires. "It will be interesting to see what sectors they see value in and decide to go after."

Many companies are buying back bonds due over the next few years and reissuing new ones to take advantage of the lower interest rates.

Up in a Down Year

Times have been good for Ichan Enterprises. With holdings in investment management, automotive, metals, real estate, and home fashion, revenue for the nine months ended September 30 was $6.17 billion, compared with $4.79 billion for that period in 2008. Net income from continuing operations was $240 million, or $3.13 per LP unit, compared to a net loss of $61 million -- $1.27 per LP unit -- for the period a year earlier. Shares are up more than 46% for the year.

Ichan Enterprises also says it's in talks to acquire a controlling stake in American Railcar Industries (ARII), held by another Icahn unit. Icahn is not the only big investor who sees value in railroads: Warren Buffett made the biggest deal of his illustrious career when Berkshire Hathaway (BRK.A) agreed in November to acquire Burlington Northern Santa Fe Corp. (BNI), the no. 2 railroad, for $26.3 billion.

Invading Trump's Territory

One category where the cantankerous Icahn sees value is gaming -- particularly the hard-hit casinos in Atlantic City, New Jersey. Already reeling from competition of slot-machine parlors in neighboring Pennsylvania, Atlantic City will be further hurt if Pennsylvania officials follow through on plans to introduce table games, such as blackjack.

In December, Icahn made a bet on the beleaguered Trump Entertainment Resorts (TRMPQ), snapping up most of the bankrupt casino company's bank debt. The Press of Atlantic City reports that Icahn is offering to put $125 million of his own money into Trump Entertainment, battling a bondholders' committee trying to turn around the company, which has filed for protection from creditors three times.

Donald Trump resigned from the company in February. He reportedly will get a 10% stake in the company when it emerges from Chapter 11 bankruptcy, a plan Icahn opposes.

Icahn has been remarkably consistent over the years, arguing that corporate managements often lose touch with the needs of shareholders. "America is going to lose its economic hegemony if we don't do something along the lines of what I'm doing, where you make managements accountable," he told Time in 2007. "When most investors, including the pros, all agree on something, they're usually wrong." Looks like investors can expect more of the same from the corporate-raider-turned-activist-investor.
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