It is hard to imagine what Carl Icahn is trying so hard to get control of Motorola (NYSE: MOT), or at least to force the company to "improve shareholder value." The firm is probably no longer worth the sum of its parts.

Earlier today Icahn rejected Motorola’s offer of two board seats. According to The Wall Street Journal "Activist investor Carl Icahn, who is waging a proxy fight to win four seats on Motorola’s board, said he has rejected a compromise offer from Motorola for two board seats."

The pressure from Icahn pushed MOT shares up to $9.69, well below the $26 where they traded in October 2006.

In the fourth quarter, Motorola’s handset division revenue fell 38% to $4.8 billion. The operation lost $388 million compared to an operating profit of $341 million in the same period a year earlier. The company sold 40.9 million handsets in Q4.

The company’s home and networks division had revenue of $2.7 billion for the period, up 11%. But, operating profits fell from $223 million to $192 million.

Motorola’s enterprise solutions operation had a 35% increase in revenue for the fourth quarter, up to $2.1 billion and operating income moved from from $323 million to $451 million.

The company had $2.8 billion in cash at the end of the year. Motorola had long-term debt of $4.2 billion and purchase obligations of $2.2 billion.

According to Barron’s Cowen recently reduced its forecast for handset sales in Q1 to 32 million. Based on recent comments from rival Sony Ericsson about softness in the market, even those figures may be high.

Motorola currently has a market cap of $22 billion. Its handset business has been on the market for over two months without any offers that the public knows of. It is entirely possible that big rivals like Samsung and Nokia (NYSE: NOK) would rather bleed Motorola than make an offer for the unit because it would be difficult to turnaround with its poor product line-up.

Sales for 2007 at the handset unit were $19 billion. That could drop considerably this year. Is the unit worth 1x revenue when it is losing both market share and money? Probably not. Based on Motorola’s price to sales ratio, the value of the unit may be well under $10 billion. That means the two remaining units would have to have bring substantial multiples. In the current climate, getting that may be close to impossible.

Douglas A. McIntyre

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