Five years after losing a heated proxy fight with billionaire Carl Icahn, Wilsonville-based Mentor Graphics said Friday it will buy out half of his remaining stake in the business.

Mentor said it will pay Icahn $146 million for 8 million shares in the company – close to 7 percent of all Mentor's stock. Icahn still has another 8 million shares.

In 2011, Icahn had sought to sell or break up Mentor, but despite winning a fight with the company and installing his own directors on Mentor's board he has been content to allow the business to continue operating and pocket the profits from its rising share price.

Icahn will receive $18.12 a share for his stock, the price Mentor's stock closed at Thursday. Absent the repurchase deal with Mentor, it might have been difficult for a high-profile investor like Icahn to sell such a large position without deflating Mentor's value – and the value of Icahn's stock.

For Icahn, who acquired his Mentor stake in 2010 when shares trading between $8 and $10, the sale comes with a tidy return. But he could have done better – Mentor traded as high as $28 a share last year, but the stock plunged in November after the company warned of a dismal outlook.

Its shares rose 31 cents, 1.7 percent, in early trading Friday.

Mentor makes electronic design automation software, highly technical tools that help engineers design computer chips, airplanes, cars and other products with sophisticated electronics. It has close to 1,000 employees at its Wilsonville campus.

The company had been benefiting from the growing complexity in computer chips, but consolidation in the semiconductor industry and new products from Mentor's rivals have undercut the business in the last several months.

The fight between Icahn and Mentor huge news in 2011. The billionaire is known for muscling his way into tired old businesses, demanding they send cash back to shareholders or break up the business.

Icahn casts himself as a crusader against entrenched, self-dealing management, but he's often derided as a corporate raider who profits at the expense of employees and uses his influence to strike deals that benefit him more than ordinary investors.

In the 2011 proxy fight, Icahn led an investor revolt and installed three of his own nominees onto Mentor's eight-member board over the vocal objections of the company. Mentor's business was entering a growth phase at the time, though, and after winning the proxy battle Icahn abandoned his public fight with the company.

Icahn didn't put up a struggle when Mentor replaced two of his directors a year later, and eventually pulled his last director from the company.

Mentor still has $90 million left in an ongoing, separate share repurchase program.

"Our decision to repurchase these shares reflects Mentor's belief in the value of our industry-leading technologies, new market franchises and strong financial position," Wally Rhines, Mentor's longtime chief executive, said in a written statement.

By: DocMemory
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