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Icahn eyes laser vision firm
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July 31, 2000: 2:22 p.m. ET
Corporate raider sets sights on Visx; shares rise amid speculation
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NEW YORK (CNNfn) - Word that corporate raider Carl Icahn is eyeing Visx Inc., a maker of laser equipment to correct vision, sent the beleaguered company's shares about 18 percent higher Monday.
Visx (VISX: Research, Estimates) disclosed Friday that a company controlled by Icahn sent the firm a letter earlier this month indicating it wants to buy $15 million, or up to 15 percent, of Visx's outstanding shares. In response to Icahn's overtures, the Santa Clara, Calif.-based company enacted a shareholder-rights plan designed to foil a takeover bid.
Icahn, a billionaire financier who specializes in buying up large stakes in out-of-favor companies, did not immediately respond to a request for comment from CNNfn.com Monday.
In afternoon trading, Visx's ailing stock gained 4-13/16 to 26-13/16. Since Dec. 1, 1999, the stock has slid about 66 percent amid patent issues, competitive pressure and declining sales. The stock has traded as high as 103-7/8 over the past year. It hit a low of 14 earlier this year.
 David Gruber, an analyst at Lehman Brothers who follows Visx, said Icahn likely is lured by the company's financial position - it has roughly $200 million in cash and short-term investments -- and its position as market leader in the young laser vision correction industry.
But Visx relies on an older laser technology known as broadbeam, while rivals, such as Bausch & Lomb (BOL: Research, Estimates) use a more advanced, narrowbeam laser, he said.
"They have gone from the technology leader to the technology laggard," said Gruber, who has a "neutral" rating on the stock.
Icahn recently announced plans to acquire up to 15 percent of the outstanding shares of struggling railroad firm CSX Corp. (CSX: Research, Estimates).
He is perhaps best known for buying control of Trans World Airlines in 1985. But despite his investment, the airline ended up in bankruptcy court protection. He gave up control of the carrier in 1993.
Under the shareholder rights plan Visx adopted Friday, shareholders will receive rights that will be distributed as a dividend at the rate of one right for each share of common stock owned as of Aug. 7.
Each right will allow the stockholder to buy a share of common stock for $150. The rights go into effect only if a person or group acquires ownership of at least 10 percent of the company's common stock or commences a tender or exchange offer. 
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Visx
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