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Illumina on Thursday urged shareholders to reject three Carl Icahn board candidates at this 12 months’s annual meeting, saying they’d “compromise the progress” of the biotech company’s core business.
“Carl Icahn’s involvement with Illumina threatens the corporate’s long-term success, and his appointed directors don’t bring the best skills to the Board of Directors,” San Diego-based Illumina said in initial statement of the representative sawing.
The DNA sequencing company told shareholders to reject any alternative cards sent by the activist investor or its affiliates. Illumina also urged shareholders to vote for the proposed board, noting that it will be sending final proxy materials soon.
The corporate didn’t provide a date for the annual general meeting of shareholders at which Icahn intends to present his candidates for election.
Illumina said it would offer more information on “the strength of our board and management team, our shareholder value delivery strategy – with innovation at its core – and the potential for Mr. Icahn’s nominees to detract from that strategy.”
Illumina’s remarks are its latest move against Icahn, who owns 1.4% of the corporate. Icahn is searching for board seats and is pressuring Illumina to pull out of its $7.1 billion takeover of cancer test maker Grail, which he said earlier marks a “recent low level of corporate governance.”
Icahn, in a press release to CNBC, said: “I might have found it comical if it weren’t so reprehensible that ILMN’s share price has fallen 63% due to such an absurd and questionable purchase by CEO Francis deSouza.”
“And the really funny thing is that it’s hard to find good CEOs on this area,” he added. “I feel you would be hard-pressed to find someone who could lose $50 billion in shareholder value in just a few months and still earn 87% more for a complete of $26.8 million in 2022.”
DeSouza took over as CEO of Illumina in 2016. Icahn meant him total salary, which just about doubled last 12 months despite a dramatic decline in Illumina’s market value. The corporate’s market capitalization has shrunk to around $35 billion from around $75 billion in August 2021, the month the Grail deal closed.
Icahn on Wednesday said Illumina should reinstate its former CEO Jay Flatley to “make things better” immediately.
Carl Icahn speaks at Delivering Alpha in Latest York City, September 13, 2016.
David A. Grogan | CNBC
On Thursday, Illumina said Icahn had previously said more favorable things about deSouza. The corporate said Icahn “supported” deSouza’s actions as CEO during a gathering earlier this month, but indicated it will not repeat those comments publicly.
Illumina stressed that Icahn is just not a long-term shareholder and had no involvement with the corporate prior to requesting board representation. The corporate noted that it “moved swiftly and deliberately” to meet Icahn, interview his bona fide nominees, and explore potential alternatives to a proxy fight.
But Icahn “didn’t want to compromise” and insisted the board add his three nominees without shareholder input, Illumina said. The corporate also claimed that Icahn said he wanted his nominees on the board because they should not independent and he can directly control them.
“My people answer to me,” Icahn said of his nominees, according to Illumina.
The corporate said Icahn’s election didn’t have adequate healthcare or genomics expertise on paper. After interviewing Illumina nominees, he concluded that in addition they lack “an original perspective or detail” on how they would really like the corporate to operate in another way.
“Each candidate as a substitute recited the identical poorly researched and unapplicable ideas regarding GRAIL,” Illumina said.
The corporate added that “it has develop into absolutely clear that neither Mr. Icahn nor his three nominated associates – Jesse Lynn, Andrew Teno or Vincent Intrieri – understand Illumina’s activities or GRAIL and related regulatory processes.”
Intrieri, founder and CEO of VDA Capital Management, was previously employed by Icahn. Lynn is general counsel for Icahn Enterprises and Teno manages the portfolio at Icahn Capital LP, the entity where Icahn manages mutual funds.
Illumina said its board identified two independent candidates and offered Icahn a gathering with them. But Icahn refused and said he would “not even endorse Jesus Christ” as an independent candidate as a substitute of his own nominees, Illumina said.
Illumina shares rose 1.5% on Thursday.