Illumina Inc. and activist investor Carl Icahn tried but failed to reach a compromise that would have avoided the public battle over seats on its board, according to a preliminary proxy statement filed by the DNA-sequencing company.
(Bloomberg) — Illumina Inc. and activist investor Carl Icahn tried but failed to reach a compromise that would have avoided the public battle over seats on its board, according to a preliminary proxy statement filed by the DNA-sequencing company.
In the days before the situation became public, Illumina had proposed to add one of Icahn’s three nominees to its board alongside one independent candidate. Icahn counter offered, demanding two of his candidates be added to the board with one independent director, according to the statement.
Icahn is quoted as saying in a meeting between Illumina Chief Executive Officer Francis deSouza and Chairman John Thompson that he “would not even support Jesus Christ” as an independent candidate over his board nominees who “answer to” him, the filing showed.
In a response to the proxy statement later on Thursday, Icahn said deSouza had broken his vow to keep the negotiations private.
“The spirit of settlement negotiations is to keep them private in the hopes of achieving peace rather than war,” Icahn said in the statement. “Today Illumina’s representatives have broken their word and gone public and taken out of context certain things that were supposedly said during these discussions.”
‘Handpicked’ Board
Icahn said his comments addressed deSouza’s ability to “manipulate his board,” which he mostly “handpicked” and would do the same with the new candidate. “So we made the comment that, even if one of his nominees was Jesus Christ, who admittedly was a great man, we would still insist on three candidates,” Icahn said.
The Illumina board had determined that Icahn’s nominees lacked relevant experience but considered a settlement to avoid a proxy contest. The San Diego-based company reiterated that conclusion in a later statement.
The two parties haven’t had any private interaction since March 9, according to the filing. The negotiations fell through and Icahn released a public letter March 13 demanding three board seats.
Read more: Illumina Tells Investors Icahn Board Nominees Aren’t Qualified
Icahn said in a preliminary meeting that he believed deSouza had done a good job managing Illumina, according to the filing. The activist investor said Wednesday that deSouza should be replaced by former Illumina CEO Jay Flatley, the Wall Street Journal reported.
Icahn contended in his letter that Illumina had overpaid in its $8 billion acquisition of cancer-detection firm Grail Inc. He also blasted it for inviting a costly legal battle with the European antitrust regulators by closing the deal without their blessings.
He has since called for a spinoff of Grail in the form of a rights offering.
Read more: Icahn Says Illumina Should ‘Get Rid Of’ Grail in Tax-Free Spin
Illumina’s shares have fallen 36% over the past year. They rose 1.5% to $225.26 on Thursday in New York trading, giving it a market value of $36 billion.
(Updates with Icahn’s statement in fourth paragraph.)
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