In the latest chapter in the saga of Forest Laboratories versus Carl Icahn, the billionaire investor has received the backing of a leading proxy adviser for two of the candidates he hopes to get onto the company's board.
Mr Icahn, who owns 10% of the firm's stock, has been highly critical of management at Forest and has proposed four candidates for the board ahead of what is set to be a terse annual general meeting on August 15. Following the exchange of several letters between the two parties, he has revealed that Institutional Shareholder Services has recommended Forest shareholders vote for Daniel Ninivaggi, chief executive of Icahn Enterprises and Pierre Legault, CEO of recruitment specialists Stone Management.
ISS states that Mr Icahn "has made a compelling case that increased independent boardroom representation and oversight of Forest's operating expenses are warranted". The high-profile investor claimed "the fact that this very well respected proxy advisory firm concluded, and recommended, that the best path forward for Forest Labs includes a board with shareholder-nominated directors is very good news for all shareholders".
Forest responded by saying that the ISS recommendation "is based on a flawed analysis that adopts Icahn's fundamental misunderstandings of the company's business model and strategic focus in support of a reckless, cost-cutting strategy with the potential to destroy value for shareholders".
The company says ISS undervalues future sales potential and ignores its strategic primary care focus. It also "underappreciates one of the best late-stage pipelines in the industry".