NEW YORK – Illumina is officially engaged in a battle over three seats on its board of directors following a Tuesday afternoon filing with the US Securities and Exchange Commission from activist investor Carl Icahn, who wants the company to offload its Grail subsidiary.
Icahn's preliminary proxy statement recommends that shareholders vote for his three preferred candidates for seats on the board at the upcoming Illumina shareholders meeting. The document lists the three current board members he believes should be replaced: CEO Francis deSouza, Chairman John Thompson, and Robert Epstein, chair of the board's corporate governance committee.
In an accompanying presentation, Icahn's camp said that, if successful, it would "encourage" the board to drop the appeals related to Grail in the US and Europe; divest Grail, "possibly via a spinoff and rights offering to shareholders"; ask former Illumina CEO and Chairman Jay Flatley "or similar individual" to return; refocus on Illumina's core sequencing business; and adopt more transparent disclosure practices.
"Carl Icahn, whose firm owns less than 1.5 percent of Illumina's outstanding common shares, has made it clear that his three director nominees — Jesse Lynn, Andrew Teno, and Vincent Intrieri, all current and former Icahn employees — would represent Icahn's interests on the Board of Illumina and answer to Carl Icahn, not the shareholders of Illumina," an Illumina spokesperson said in a statement. "Unlike Icahn's director nominees, Illumina's Board of Directors acts in the best interests of all of its shareholders and exercises considered and deliberate independent judgement."
The filing also contains Icahn's version of events leading up to this point, including a short period of negotiation between the parties. This follows a preliminary proxy statement filed by Illumina late last month.
At a March 2 meeting in Florida with deSouza and Thompson, Icahn said he asked why Illumina was pursuing Grail "so maniacally." Thompson allegedly said, "'Because I want to own it,' and deSouza agreed," according to the filing.
In Wednesday morning trading on the Nasdaq, shares of Illumina were flat at $228.58.