Billionaire investor gives up on Apple buyback plan

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Billionaire investor gives up on Apple buyback plan

Icahn takes a step back from lengthy campaign.

Activist investor Carl Icahn has backed off from his efforts to convince Apple to increase its stock buybacks, citing the company's recent repurchases as well as an influential proxy adviser's call against his proposal.

In a letter to Apple shareholders today, Icahn said he was ditching his non-binding proposal to force Apple to add another US$50 billion (A$56 billion) to its stock buyback plan, "especially when the company is already so close to fulfilling our requested repurchase target."

Apple shares closed up 1.8 percent higher at US$528.99 today.

For months Icahn had been asking Apple to boost its stock buyback program, proposing the iPhone maker repurchase another US$50 billion.

On Sunday, Institutional Shareholder Services recommended shareholders vote against Icahn's nonbinding proposal, saying the motion would "micromanage" how the company uses capital.

Proxy advisory firm Egan-Jones also recommended voting against Icahn's plan, which was up for a vote at Apple's February 28 shareholders meeting.

Apple CEO Tim Cook last week said he wanted to be "aggressive" and "opportunistic" in buying back shares. He pointed out the company had repurchased US$14 billion in stock in the two weeks since reporting financial results that disappointed Wall Street.

With the latest purchases, Cook recently said Apple had bought back more than US$40 billion of its shares over the past 12 months. He said it was a record for any company over a similar span.

Icahn wrote in his open letter that Apple's recent share buybacks, amongst the largest in history, have been a bit like "bailing with a leaky bucket," given the scale of its cash reserves - though they were enough to placate him.

"As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both 'opportunistic' and 'aggressive' and we are supportive," Icahn wrote.

Apple had almost US$160 billion in cash at the end of 2013.

In late January, Icahn tweeted he had bought another half-billion dollars of Apple stock, boosting the value of stake in the company to more than US$4 billion. At the time, Icahn said the decline in Apple shares presented "a great opportunity" to add to his position.

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