Icahn Drops Effort to Oust Visx Board

Financier Carl Icahn dropped his effort to oust the board of Visx Inc., the biggest maker of equipment for laser eye surgeries, but left open the prospect that he--either alone or with others--might still launch a takeover bid for the company.

Separately, a company bankrolled by Icahn made a buyout offer for New Hyde Park, N.Y.-based Morton’s Restaurant Group Inc., which operates more than 60 restaurants, mostly as Morton’s of Chicago steakhouses, including ones in Beverly Hills and Palm Desert.

Icahn, who already owns a 10% stake in Santa Clara-based Visx, for months has pressured the company to sell itself. As Visx resisted, Icahn started a proxy fight to replace Visx’s board with his own slate of directors whose mandate would have been to sell the company.

The New York financier also had said he was prepared to make his own offer of $32 a share, or nearly $2 billion, provided he got permission to closely examine Visx’s operations and books--a process known as due diligence--and that he was able to secure the necessary financing.

But Icahn said that after speaking with other major Visx stockholders he was satisfied that Visx “has a sincere interest in a sale at $32 a share” and thus trying to oust Visx’s board at the company’s annual meeting Friday was no longer necessary.

Wall Street remains somewhat skeptical, however, as Visx’s stock closed Tuesday well below $32 a share. The stock gained 47 cents to close at $20.72 on the New York Stock Exchange.

Visx said last week that it “would not stand in the way” of a $32-a-share or higher cash offer and was willing to let its stockholders decide the matter, though it has said that Icahn’s proposals offered “nothing new” over Visx’s own efforts to find a buyer.

Visx, which had $200 million in revenue in 2001, last year hired the investment banker Goldman, Sachs & Co. to look into a possible sale or merger.

Elizabeth Davila, Visx’s chief executive, said the company was “prepared to permit” Icahn to carry out his due diligence for a possible purchase.

Icahn’s efforts come against a backdrop of trouble in the laser eye surgery industry, where fierce competition has pinched profits at Visx and at many centers.

Buyers of Visx’s equipment not only pay a purchase price for the gear but also have to pay royalties to Visx.

The offer for Morton’s was made by BFMA, a Florida-based holding company that owns a 9.3% interest in Morton’s. BFMA said it was prepared to pay $28.25, or $106 million, for the stock it doesn’t own. Morton’s stock surged $3.39 a share to close at $27.30 on the NYSE.

BFMA said it received a commitment from Icahn’s company to provide $240 million in financing to help fund the takeover. Thomas Baldwin, Morton’s chief financial officer, said the company had no comment pending its review of the bid.