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Board chair removed by Illumina shareholders during proxy fight with Carl Icahn.

Illumina shareholders oust board chair in Carl Icahn proxy battle

Illumina shareholders oust board chair in Carl Icahn proxy battle

Carl Icahn, an activist investor, has succeeded in ousting Illumina’s board chair after obtaining enough support from the biotech company’s shareholders. John Thompson, the chairman, was removed from his position and a new chair will be chosen in the coming weeks. Icahn had campaigned to remove the company’s CEO Francis deSouza and Thompson, but deSouza survived the proxy fight. Shareholders also voted to install one of Icahn’s board nominees, Andrew Teno, a portfolio manager at Icahn Capital LP, where Icahn manages investment funds. Illumina had previously pushed back against Icahn’s nominees, claiming that they lacked relevant skills and experience.

The proxy fight between Icahn and the biotech company has lasted for two months and was centered on a controversial acquisition. Illumina had acquired Grail, a cancer test maker, for $7.1 billion in 2021. Icahn accused Illumina’s executive management and the nine-member board of poor oversight, particularly with regard to the Grail acquisition. He called on the company to unwind the “absurd and questionable” deal and oust its CEO Francis deSouza “immediately.” Icahn has also slammed deSouza’s massive pay bump despite a steep drop in the company’s market value. Illumina’s market cap has fallen from about $75 billion in August 2021 when it closed the Grail acquisition to roughly $33 billion.

Much of Icahn’s resistance to the deal stems from Illumina’s decision to close the acquisition without approval from antitrust regulators in the U.S. and Europe. In April, the Federal Trade Commission ordered Illumina to divest itself of the acquisition over concerns that it would stifle competition and innovation. The European Commission also blocked the deal last year over similar concerns. Illumina is appealing both orders and expects final decisions in late 2023 or early 2024. The company has repeatedly defended its acquisition of Grail, saying the deal “makes sense” as it can significantly expand the market for Grail’s early screening test.

Icahn encountered his own criticism during the proxy battle. Notable short seller Hindenburg Research had accused Icahn Enterprises of being overvalued and likened it to “Ponzi-like economic structures.” Icahn Enterprises called those claims “misleading and self-serving.”

FAQs:

Who is Carl Icahn?

Carl Icahn is an American billionaire investor and businessman. He is known for engaging in shareholder activism and taking stakes in companies to push for changes in their management or operations.

What is a proxy fight?

A proxy fight is a battle between a company’s management and a shareholder or group of shareholders seeking to gain control of the company’s board of directors. It typically involves the use of proxy votes, which allow shareholders to vote on certain matters without attending a shareholders’ meeting in person.

What was the controversy over Illumina’s acquisition of Grail?

Illumina’s $7.1 billion acquisition of Grail, a cancer test maker, was controversial because the company closed the deal without approval from antitrust regulators in the U.S. and Europe. The Federal Trade Commission later ordered Illumina to divest itself of the acquisition over concerns that it would stifle competition and innovation. The European Commission also blocked the deal last year over similar concerns. Illumina is appealing both orders and expects final decisions in late 2023 or early 2024.

Who is John Thompson?

John Thompson was the chairman of Illumina’s board of directors before being ousted by Carl Icahn. A new chair will be chosen in the coming weeks.

Illumina shareholders oust board chair in Carl Icahn proxy battle
Illumina shareholders oust board chair in Carl Icahn proxy battle

Illumina’s Board Chair Dismissed by Shareholders in Proxy Contest with Carl Icahn

Biotech company Illumina has announced its chairman, John Thompson, has been ousted following a successful push from activist investor Carl Icahn for change. While Illumina’s CEO Francis deSouza survived the proxy battle, Icahn’s nominee Andrew Teno was chosen to join the board. The vote marks the end of a months-long fight between the San Diego-based firm and Icahn over its $7.1bn acquisition of cancer test maker Grail. The Federal Trade Commission ruled in April that Illumina must divest itself of the company over concerns it would stifle competition. The company is appealing both the US and European rulings.

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