Illumina (NASDAQ:ILMN)
Carl Icahn has announced his intention to propose three new board members for Illumina (NASDAQ:ILMN), citing the company’s continued pursuit of its planned acquisition of Grail Inc. despite regulatory efforts to halt the deal. On Monday, Illumina stock climbed by 20%.
According to a letter Icahn delivered to Illumina’s board on Monday, the billionaire activist, who had been trying to make a deal with Illumina to avoid a proxy war, planned to propose Vincent Intrieri, founder and CEO of an investment firm, and two of Icahn’s subordinates, Jesse Lynn and Andrew Teno.
Investor Carl Icahn is said to have claimed that gene-sequencing giant Illumina paid too much for the acquisition of Grail and pushed forward with the purchase regardless of whether or not the deal will be approved by European authorities. Icahn pointed out that Illumina must pay $800 million in operational expenditures without having any control over Grail or being able to reap any benefits from the acquisition.
“Now, banks are making it impossible, in general, for enterprises without substantial balance sheets to borrow,” Icahn wrote. But, getting the necessary funding for Illumina will take a lot of work. This company is now mired in quicksand. We firmly believe our three highly skilled candidates are specially equipped because of their expertise to protect Illumina stock from falling deeper into the quicksand.”
Although Icahn was “clear and unrelenting” in his demand that “any settlement should provide him outsized influence and control,” Illumina replied to his letter by saying it had many talks with the activist.
According to a statement released by Illumina, “The Board has found Icahn’s candidates lack necessary skills and expertise, and that it is not in the best interests of shareholders to nominate Mr. Icahn’s three nominees to the Board of Illumina.
Three months after the European Union blocked Illumina’s $7.1 billion purchase of Grail on antitrust grounds and innovation concerns, the European Commission ordered Illumina to sell Grail in December.
Icahn’s letter “does not represent a grasp of the regulatory process” and “does not realize the genuine value that GRAIL may deliver to Illumina’s stockholders,” Illumina said in a statement. Before the European Commission’s divestment directive, Illumina began divesting itself.
On Sunday, the Wall Street Journal broke the story of the Icahn letter.
In a closed hearing last month, Illumina argued against a divestiture requirement for the 2021 purchase of cancer test manufacturer GRAIL in front of top EU and national antitrust regulators.
Featured Image: Pexels @ Chokniti Khongchum
