WILSONVILLE, OR -- Carl Icahn is one unhappy Mentor Graphics shareholder. The notorious investor took Mentor's board to task for rejecting his $1.9 billion offer to buy the company and its followup decision today to sell up to $250 million in new bonds, a move, he says, will further dilute the company's stock.

In a letter submitted today to the company's board, Icahn declared, "In the dark of night, just one day after its board rejected our offer of $17 per share, the company announced that it is going to offer to sell, in a private placement to institutional investors, between $220 [million] and $253 million of convertible debt. This news should outrage our fellow shareholders as it does us."

"After 17 years of a stock that has done nothing, isn't it time for the shareholders to be given every opportunity to determine if they want to sell their company rather than to have these opportunities sabotaged?"

In the letter, Icahn railed against the board's policies and moves, which most analysts believe were enacted to head off his attempts to gain control of the company. Icahn currently holds a 14.7% stake, just under the 15% threshold that would launch Mentor's poison pill proviso. "The continual dilution of the Mentor Graphics common stockholder appears to be business as usual for the company. On the one hand, the company indicates that the price that we offered as a stalking horse bid for the company is far too low and a sale of the company to a strategic acquirer is too risky; on the other hand, it is choosing to issue securities convertible into stock that would dilute shareholders and make a tender offer or other acquisition proposal by a potential acquirer a great deal more difficult to accomplish.

Icahn claimed taking on more debt was evidence Mentor needed new directors who "consider what is best for our fellow shareholders and are not satisfied with the status quo."

Moreover, he singled out chairman Wally Rhines for "pocketing 17 years of salaries and bonuses"; Rhines has come increasingly under fire for his small stake in Mentor, which some investors claim makes him resistant to their demands.

Icahn further accused the directors of "trying to ensure that they can keep the country club going for the next 17 years while the shareholders may face continuing dilutive issuances by the company."

Mentor has not yet responded to Icahn's letter.