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Personal Message to Carl Icahn RE: MENT

Personal Message to Carl Icahn RE: MENT
by Daniel Nenni on 06-16-2010 at 6:06 pm

According to an amended 13S filing, you now own 7.9% of Mentor Graphics, up from 6.86% disclosed on May 27th. Just what are you thinking!?!?!? Clearly you are a smart guy and you pretty much invented the game of corporate raidership, but EDA? Mentor Graphics? EDA does not need you, Mentor Graphics does not need you, I do not need you Mr Ichan.

In 2008 your net worth was US$14 billion, putting you in an eight way tie for the 46th richest man in the world. In 2010 Forbes recalculated your net worth as $10.5 billion, making you the 59th richest person in the world. You can only go down from here Carl. Me, on the other hand, can only go up. This is my 27[SUP]th[/SUP] Design Automation Conference, EDA is my life, and I will fight you for it with my very last blog.

Being a pilot myself and a big aviation fan, I remember you buying control of TWA in 1985 and carving it up like a Thanksgiving Day turkey. You sold TWA’s most profitable assets to competitors, putting what was left into bankruptcy. TWA eventually got rid of you in 1993 but never recovered and was later acquired by American Airlines. A sad ending for an aviation pioneer that was “Run by Flyers” including my all time favorite pilots Charles Lindbergh and Jack Frye.

Fortunately, that approach is not going to work in EDA. There are no competitors strong enough to buy Mentor’s most profitable turkey parts. Synopsys is the only EDA company with a bankroll large enough. Fortunately, Synopsys holds either the #1 or #2 market position in every semiconductor design segment so what is their motivation to buy a Mentor drumstick or wing? Synopsys also has an ego larger than the EDA turkey itself and has been competing head-to-head with Mentor since birth. Buying the Calibre franchise would be admitting DRC defeat and that is just not part of the Synopsys ultra competitive culture.

What about Cadence? There is even worse history there. Remember when Cadence tried to buy Mentor and Mentor returned the favor by trying to buy Cadence? That was Cadence CEO Mike Fister’s Waterloo. Even if the new Cadence billionaire VC CEO Lip-Bu Tan could raise the money for Mentor parts the company integration would not work. Mentor just does not like Cadence. Speaking of that, I had beers with Cadence CMO John Bruggeman Monday night. Great guy, great sense of humor, great use of hair products, he totally gets me. So do me a favor, next time you see him shake his hand, spin around then shake it again. That is the secret EDA360 handshake, he will greatly appreciate your support!

What about Magma? Looking at their balance sheet, I could probably buy Magma if things don’t turn around soon.
One corporate raidering possibility I see is a foundry buying Mentor parts. TSMC, GlobalFoundries, and Samsung, all have the money and competitive spirit to do so but the top fabless semiconductor companies might not care for that at all. Bringing semiconductor design full circle with tools coming directly from the semiconductor manufactures? Is that really what we want to do here?

Another possibility is a fabless company buying the Mentor giblets. Kind of like the rumor that Apple will buy ARM. Definitely a game changer, definitely would be fun to watch, but definitely would not be in the best interest of us electronic gadget consumers.

So Carl, EDA needs Mentor, EDA needs three big dogs at the food bowl. Lets have lunch, talk turkey, I have some other corporate raidering ideas that are much more interesting than EDA.

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