Icahn Battles Illumina For Three Board Seats
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Billionaire activist Carl Icahn plans to nominate three people to the board of the San Diego-based company, claiming the biotech company has cost its shareholders about $50 billion by going ahead with a risky takeover despite regulators' opposition.
Illumina vs Carl Icahn
The billionaire activist is running for three seats on the biotechnology board. Carl Icahn plans to nominate three people to the board of the San Diego-based company, according to a letter Mr. Icahn plans to send to Illumina shareholders on Monday. Icahn says in the letter that he tried to make a deal with Illumina to avoid a proxy battle.
In the letter, Icahn accuses Illumina of overpaying for a business that earned "exactly zero dollars in revenue" and then closing the deal, despite not knowing if European regulators would bless him. He writes that it costs Illumina $800 million a year to hold the Grail, and that it faces a substantial tax bill if eventually forced to sell it.
He says his candidates — Vincent Intrieri, founder and CEO of the mutual fund, and two of Icahn's deputies, Jesse Lynn and Andrew Teno — will bring experience in dealing with crises to the board.
Illumina said it was advising its shareholders to vote against Icahn's candidates.
Illumina and Grail
Illumina manufactures and sells genetic sequencing machines and the chemicals they use, and its customers include Grail and Grail's rivals.
Once a darling of biotech, Illumina was respected for its DNA sequencing capabilities and was valued at over $70 billion in the summer of 2021. In recent months, however, its value has fallen to about $30 billion as the company acquired cancer screening company Grail Inc and remains on hold as the company faces increased competition from lower-cost rivals.
Illumina in 2020 agreed to buy Grail, which is developing blood tests for early cancer detection, and closed the deal in August 2021, despite encountering antitrust resistance from both the Federal Trade Commission and the European Union. Illumina said at the time that if she hadn't, she might have missed the end of the deal.
The US has since ruled in favor of Illumina while the EU sought to block the deal. This meant that Illumina had to keep the Grail as a separate entity.
The European Union released details of a planned order requiring Illumina to terminate the Grail deal last December. The Commission banned the deal earlier this year over fears it would stifle innovation and hurt consumer choice.
Illumina appealed the European Commission's decision last year and said it would review strategic alternatives to Grail in case it was unable to delay the expected EU divestment order.
Illumina share prices
As of last May, Illumina's share price is below $250.00. At the beginning of March, stock prices rose in the direction of 221.21, but did not hold and fell. Recently, the stock price is below 200.00 and recently closed at 194.01. This level is the lowest level so far in 2023.
Source: wsj.com, finance.yahoo.com
