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Update: Blockbuster Confirms Icahn Slate to Board

11 May, 2005 By: Erik Gruenwedel

Carl Icahn (L) and John Antioco

Maverick investor Carl Icahn and veteran entertainment industry executives Strauss Zelnick and Edward Bleier are headed onto Blockbuster's seven-member board, according to preliminary results of Big Blue's board election today in Dallas.

Final results will be confirmed in the next few days, according to a Blockbuster spokesperson.

Ed Stead, Blockbuster general counsel, said the current board of directors passed a resolution, with Icahn's apparent consent, to hold a meeting by the end of this week to place Antioco back on the board.

Stead said he expects a continuation of management, according to the spokesperson.

Whether Antioco, who said he continues to believe Blockbuster has great potential, could work with Icahn — an outspoken critic of the CEO's belated efforts to establish an online presence, his decision to eliminate late fees and failure to acquire rival Hollywood Entertainment Corp. — remains unclear.

“I continue to believe in the business strategy we have been implementing,” Antioco said in a statement.

The embattled CEO had previously said he would resign if not re-elected to the board; thus, the move to reinstate him to the board could be seen as an effort to keep Antioco from exercising an exit compensation package valued at more than $50 million.

In addition to voting out Antioco, about 77 percent of shareholders voted not to re-elect board members Linda Griego, a television production company executive, and restaurant executive Peter Bassi.

Prior to the election, partial victory for Icahn appeared probable when San Francisco-based proxy research firm Glass Lewis & Co. reportedly endorsed Icahn's entire slate and Blockbuster took the unusual steps to clarify how shareholders could vote in candidates from both Icahn and Blockbuster's proxies.

Icahn said he was “elated by this grand victory for corporate governance” and thanked all shareholders who supported him, as well as running mates, Zelnick and Bleier.

“My nominees and I are looking forward to working hand-in-hand with the rest of the board and Mr. Antioco,” Icahn said in a statement.

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