Moto’s CEO will lead handset business: Icahn files for four board seats in upcoming election

Change is coming swiftly at Motorola Inc., fueling further speculation on the company’s direction.
CEO Greg Brown apparently told employees Friday in an internal memo that he personally will take charge of the company’s ailing handset business. Brown’s internal memo, reported first by Reuters, followed by hours the CEO’s press release announcing that Motorola may seek to create a standalone business for its handset division.
Motorola did not immediately return phone calls seeking confirmation of the news.
Stu Reed, who was named in September to head the devices unit after a year of transition, will remain with the company and work with Brown on the handset business, according to Reuters.
Meanwhile, activist investor Carl Icahn filed to nominate four board members to the company’s 13-member board when Motorola convenes its annual shareholder meeting this spring. Icahn’s reputation, at least historically, is derived from his takeover of underperforming companies, then breaking them into parts for sale.
Brown’s public announcement of a structural change in Motorola’s businesses raised speculation that the company may be seeking an outside investor to take a minority stake in the handset division, which may be worth some $8 billion, according to an estimate last week by American Technology Research analyst Mark McKechnie.
McKechnie downgraded his rating on Motorola to “sell” today, and the stock was down nearly 4% by midday.
Analyst Tero Kuittinen at Avian Securities L.L.C., said last week that a joint venture akin to Sony Ericsson Mobile Communications or an infusion of private equity might be the goal.
Brown’s role at the head of mobile devices may be seen as reassurance that the company’s CEO was paying close attention to his company’s bread-and-butter division – handsets have provided more than 50% of Motorola’s overall revenue and profit, at least until recently – or it could be seen as reassurance that Motorola does not plan to dump its handset business.
The shareholder meeting has been held in May, but a date for the upcoming meeting has not been set. Icahn failed to win a seat for himself last May, as the company began reporting a series of dismal quarterly results. According to Icahn’s filing, he or companies he controls hold more than 114 million shares -about 5% of Motorola’s outstanding stock.