Icahn scores partial Illumina win amid pressure to defend investment acumen

Reuters

Published May 25, 2023 01:59PM ET

Updated May 25, 2023 05:07PM ET

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Carl Icahn secured a seat on Thursday for one of his three nominees to the board of gene sequencing machine maker Illumina Inc (NASDAQ:ILMN), a partial victory for the activist investor who is struggling to burnish his credentials following a shortseller attack on his company.

Illumina said Icahn nominee Andrew Teno won enough shareholder votes for election, confirming an earlier Reuters report. He will take the seat of board Chairman John Thompson, who failed to win reelection.

Illumina's market value of $30 billion made the fight this year's largest proxy contest to go to a shareholder vote. Its shares closed down 9% at $193.53 on Thursday after Icahn failed in his bid to change the company's management by also ousting Chief Executive Francis deSouza from the board.

Icahn had accused Illumina of poor oversight, especially with regard to its $7.1 billion acquisition of cancer test maker Grail. Illumina completed the deal despite opposition from U.S. and European antitrust regulators, who are now trying to force the company to unwind it. Icahn argued that Illumina lost $50 billion in value following the deal because investors worry that the company will be forced to divest Grail at a big loss.

Icahn is battling to restore Wall Street's confidence in his investment acumen. Shares of investment company Icahn Enterprises LP have lost 60% of their value since May 2, when a Hindenburg Research report accused it of artificially inflating its dividend yield and the value of its assets. Icahn has denied the claims.

Icahn Enterprises shares lost another 14% on Thursday, reaching their lowest level since 2004, after hedge fund veteran William Ackman tweeted more criticism about the company's finances.

Icahn rejected an offer from Illumina earlier this year for a board seat for one of his nominees and another seat for an independent candidate that would have averted the proxy battle.

That arrangement would not necessarily have been the same as the outcome of the vote, given that it led to Thompson's ouster.

"I look forward to serving on behalf of all shareholders and stakeholders. I am happy to say that activism is alive and well at Icahn," Teno said in a statement.