Icahn’s Apple Buyback Seen Failing in Bonds: Corporate Finance
This article is for subscribers only.
Apple Inc. bondholders are signaling investor Carl Icahn’s appeal for an additional $150 billion in share buybacks is little more than wishful thinking.
While Icahn, who supports funding the transaction with debt, said Oct. 1 that he “pushed hard” for the repurchases during a dinner with Chief Executive Officer Tim Cook, the extra yield creditors demand to own Apple notes instead of Treasuries declined. That shows investors doubt the proposal will be adopted with the iPhone maker already returning $100 billion to shareholders in a program that included $16 billion of buybacks last quarter, according to Frost Investment Advisors LLC.