Another day and another terse exchange of letters between Forest Laboratories and billionaire investor Carl Icahn who is hoping to get his candidates onto the board of the US firm.
In the latest chapter of this increasingly bitter struggle, Mr Icahn, who owns 10% of the firm’s stock, has written to Forest’s non-management board members, saying “I am appealing to you directly because to date my overtures to [chief executive] Howard Solomon have fallen on deaf ears”. He repeats his earlier claim that “I sought to avoid a proxy contest by having you add Eric Ende and Daniel Ninivaggi to the board”, a request rejected by Mr Solomon.
Mr Icahn says “it is very reasonable for a shareholder of my size and with my track record to ask to nominate two persons to a board – one internal and one independent – without seeking the removal of any incumbent directors”. Noting that “time is running short” ahead of an annual meeting on August 15, he added that “if you grant me representation on the board, we can quickly avert the continuation of a prolonged and contentious proxy fight”.
However, Forest’s independent directors have responded and they are not impressed with Mr Icahn’s stance. They state that the rejection of his settlement offer, while communicated by Mr Solomon, “was done with the full knowledge and unanimous support of Forest’s entire board”, and note that Mr Ende “was overwhelmingly rejected by our shareholders last year”.
Mr Ninivaggi is described as “a salaried Icahn employee with absolutely no relevant experience”. The directors add that “avoiding a proxy contest by adding these two individuals to the board may have been expedient, but we must consider the quality of the candidates, and they are woefully inadequate”.
They conclude by saying that “our directors must be responsible to all of our shareholders, and cannot be dedicated to the interests of any single shareholder, especially when that shareholder has a self-serving agenda as clear as yours”.
