Carl Icahn to initiate proxy battle with Illumina — again
Activist investor Carl Icahn is gearing up to initiate another proxy fight at gene sequencing giant Illumina (ILMN) , aiming to appoint additional nominees to the company's board. This comes just months after shareholders elected one of his candidates amid criticisms of Illumina's acquisition of Grail.
Now, Icahn is looking to elect more of his representatives in the boardroom as Illumina faces challenges following the Grail deal.
Yahoo Finance's Ines Ferré breaks down all the details.
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Video Transcript
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SEANA SMITH: Activist investor, Carl Icahn, is ready to launch another proxy battle with Illumina to put more of his nominees on the board of the gene sequencing company. Now, this comes months after shareholders elected one of his director candidates following regulatory roadblocks over the buyout of blood test maker, Grail. Yahoo Finance's Ines Ferre is here with more on the ins and outs of this activist investor battle, been studying it all morning. Ines, what can you tell us?
INES FERRE: Yeah, so billionaire, Carl Icahn, isn't giving in up-- giving up on putting more of his nominees on that board. So Icahn has been a big critic of the $7 billion acquisition of Grail, the cancer detection test maker. Now the deal has brought nothing but regulatory problems for Illumina. Let's back up for a second, and put this all into context for you.
Illumina took over Grail in August 2021, and it did so without securing regulatory approval from the European Union. So subsequently EU regulators blocked that deal on concerns that it was-- that it would stifle innovation. And the EU slapped a fine on Illumina, and then it ordered the company to unwind the Grail deal. Amid all this, you had Icahn-- Carl Icahn that sent a letter to the board saying that his nominees need to be on that board, and that they have experience with dealing with crisis.
Icahn said he wanted to strike a deal and avoid a proxy battle in October, but shareholders voted in-- in Andrew Teno. He's a portfolio manager working for Icahn. So he has a win there, and he ousted the chairman. Illumina announced it is divesting Grail, and Icahn reportedly wants more of his people on the board now for the process. And going forward in a letter that was made public in a filing, Icahn wrote, "It would be a great mistake to allow the legacy conflicted directors to influence Illumina given their history of reckless decision-making and value destruction.
So basically what he's saying is here. Look, he's been a very big critic of this deal. The deal went south because of the EU regulators. And he is criticizing the board, and he's criticizing the company for having made this deal in the first place and saying that the stock-- if you take a look at the stock, let's pull up the chart if we can for Illumina, the stock is down about 75% since that deal went through in 2021. And it's wiped out about $55 billion in value for shareholders. So he's very angry about that and that's why he wants his people on that board.
BRAD SMITH: All right. This puts perhaps a big cap on. And who knows if there's some late year type of activist activity that's still yet to come forward. But this just the latest in a year full of activist campaigns as well. Yahoo Finance's own Ines Ferre. Thanks so much, Ines.
