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Blockbuster’s Slate Faces Test As Icahn Nominates 3 for Board -Wall Street Journal

04.11.05
Martin Peers

Mr. Icahn says Dallas-based Blockbuster is being mismanaged and he wants the company to pay bigger dividends to its shareholders.

Both Mr. Bleier and Mr. Zelnick are well known in Hollywood, particularly Mr. Bleier, who spent decades at Warner Bros. But Blockbuster was dismissive of the nominations. "We are not familiar with either of the individuals that Mr. Icahn has put forward or what they or Mr. Icahn have accomplished that would be beneficial to Blockbuster's business or shareholders," a spokesman said.

Mr. Icahn's complaints about Blockbuster's management may be attractive to many Blockbuster shareholders. The company became independent last fall when it was split from its former parent, Viacom Inc. Now, the biggest shareholders are mostly hedge funds, private investment partnerships that are increasingly emerging as activist shareholders. More than 25% of the voting stock is held by half a dozen big shareholders, including Mr. Icahn and various hedge funds, according to shareholder records compiled by FactSet Research Systems.

A shareholder with a significant stake Friday said he was open to Mr. Icahn's ideas, but wasn't sure this was the right time to move against Mr. Antioco. Word that Mr. Icahn would nominate a slate of candidates sent Blockbuster's stock up 5.3%, or 51 cents, to $10.21 in 4 p.m. New York Stock Exchange composite trading.

Mr. Antioco has lately taken aggressive and costly steps to deal with competition from both DVD mail-order rivals like Netflix Inc. and mass merchants like Wal-Mart Stores Inc.