Investor Carl Icahn waging another proxy battle over Illumina’s failed acquisition of Grail – San Diego Union-Tribune
Investor Carl Icahn waging another proxy battle over Illumina’s failed acquisition of Grail – San Diego Union-Tribune
Author: Natallie Rocha
Published on: 2023-12-20 19:37:20
Source: Technology – San Diego Union-Tribune
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Less than 24 hours after biotech giant Illumina said it would divest early cancer detection firm Grail, activist investor Carl Icahn published a letter announcing he’s ready to do battle against the San Diego company’s board — again.
His decision traces back to Illumina’s $7.1 billion bid to buy Grail, a startup that makes an early cancer detection test. Illumina closed the deal in August 2021 despite antitrust concerns from U.S. and European regulators.
The Federal Trade Commission challenged the deal in March 2021 and after fighting the decision in federal appellate court for several years, Illumina lost the case and announced Sunday it would divest Grail.
Icahn has been a vocal critic of how Illumina’s leadership pushed through the acquisition that snared the biotech company in regulatory fights and dashed its stock value.
Earlier this year he waged a proxy battle that successfully removed Illumina’s chairman John Thompson, and replaced that seat with an Icahn ally. Illumina’s CEO Francis deSouza and other board members were also targeted, but survived the fight.
Then, in June deSouza — who’d served in a leadership role at Illumina for more than a decade — resigned. He was replaced in September by a candidate outside of Illumina, Jacob Thaysen.
Illumina will divest Grail after losing battle with FTC. How did the San Diego biotech’s $7B deal unravel?Now, Icahn wants to get rid of the remaining board members who had a hand in closing the Grail acquisition. At the beginning and end of his letter, Icahn expresses the belief that by ousting the group of legacy board members, “CEO Jacob Thaysen, the new directors and Illumina’s employees will restore Illumina back to the great company it once was and can be again.”
Illumina declined to comment.
Icahn’s letter — addressed to fellow stockholders — does not specify how he plans to remake Illumina’s leadership, but it makes his objectives clear.
“We have major misgivings that as long as this current board remains in power, even if there is a divestiture, it will come with far too many strings attached,” Icahn writes. “Why should stockholders trust the legacy conflicted directors with the GRAIL divestiture process?”
He accuses board members of being “conflicted” because he says they are “worried about personal liability for the billions of dollars they have cost the Company through their negligence cannot be trusted to make clear minded decisions.”
Unsealed lawsuit by investor Carl Icahn accuses board, ex-CEO of causing ‘Illumina to break the law’Although Illumina’s appeal is dead in the U.S. courts, the case in Europe is ongoing. The European Commission fined Illumina a record $476 million in July for pushing through the acquisition without approval. In October, it ordered Illumina to divest Grail. The company has pushed back on these challenges arguing the European regulators don’t have jurisdiction over Grail, which doesn’t do business in Europe.
This case will carry into next year and the outcome will determine whether Illumina is subject to the $476 million fine.
Icahn also takes issue with the board’s financial oversight and is suing seven board members as well as deSouza for allegedly causing “Illumina to break the law.” He shares an analysis that Illumina’s share price has declined by roughly 75 percent since the Grail deal closed, compared to the 20 percent decline in performance for the Nasdaq Biotech Index.
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