Illumina Inc. advised investors not to support the director nominations from billionaire investor Carl Icahn who declared a proxy battle against the maker of DNA-sequencing machines.
(Bloomberg) — Illumina Inc. advised investors not to support the director nominations from billionaire investor Carl Icahn who declared a proxy battle against the maker of DNA-sequencing machines.
Icahn, who has a 1.4% stake in the company according to a filing, said in a letter Monday that he had nominated three candidates for Illumina’s nine-member board. Icahn called the company’s management and board irresponsible in spinning off and later re-purchasing Grail Inc.
Illumina Chief Executive Officer Francis deSouza and Chairman John Thompson spoke to Icahn multiple times after receiving his nominations, the company said in a statement. The nominees shouldn’t be added as they “lack relevant skills and experience.” They also said Ichan failed to grasp the issues involved in the company’s antitrust fight with European regulators over the Grail transaction.
“Icahn’s letter neither recognizes the real value that Grail can provide to Illumina’s shareholders, nor reflects an understanding of the regulatory process,” Illumina said in the statement. “Illumina is moving as quickly as possible to arrive at a resolution, with divestiture work already underway in advance of the European Commission’s divestiture order.”
Saying he had tried to work with Illumina in private, Icahn criticized the decision to sell Grail without investors’ blessing, only to overpay when later buying it back. Icahn said the company is spending investors’ money appealing regulators’ decision to block the deal, even though they had telegraphed their disapproval prior to the agreement.
‘Fired Immediately’
Icahn told investors in his letter what he would do. “The management team and board of directors that created this mess would be fired immediately and a thorough investigation would be conducted to ascertain whether they engaged in gross negligence (or even worse),” he wrote.
Icahn’s three nominees are Vincent Intrieri, Jesse Lynn and Andrew Teno. Intrieri, a former employee of Icahn, is the CEO of private investment fund VDA Capital Management. Lynn and Teno are currently employed by Icahn and have held director positions in public companies.
Grail emerged from Illumina’s accelerator program and was spun out in 2016. In 2020, Illumina said it would acquire Grail “to launch a new era of cancer detection.”
Antitrust officials in the US and Europe have tried to block the deal, saying it would thwart competition. Illumina closed the transaction in 2021 anyway and has since been fighting the European regulators who are trying to unwind the acquisition.
San Diego-based Illumina is the longtime leader of the DNA-sequencing market but has recently started facing more pressure from upstart competitors offering less-expensive alternatives. Illumina has disappointed investors with multiple reductions to its sales forecast in recent quarters.
The company’s shares have fallen 25% in the past year, giving it a market value of about $36 billion.
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