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Carl Icahn Responds to Illumina's Obfuscations and Prepares for a Proxy Fight

DEF 14 Inc. March 19, 2023

Billionaire investor Carl Icahn has been making headlines lately for his public disputes with genetic sequencing company Illumina. Icahn, who owns around 6% of Illumina's shares, has been critical of the company's management and strategic decisions, particularly their acquisition of cancer detection startup Grail.

Icahn's latest move in this ongoing battle has been to call for a proxy fight, which would allow him to nominate his own slate of directors to the Illumina board. He has also urged the company to unwind the Grail deal, which he argues was a poor use of resources.

In response, Illumina has accused Icahn of spreading misinformation and trying to advance his own interests at the expense of other shareholders. They have defended the Grail acquisition as a smart strategic move that will pay off in the long run.

Icahn, however, remains unconvinced. In a letter to Illumina shareholders, he accused the company of "obfuscations" and of failing to provide clear answers to his concerns. He argued that the Grail deal was a distraction from Illumina's core business of genetic sequencing, and that it represented a risky bet on an unproven technology.

Icahn also criticized Illumina's board for its lack of diversity, noting that all of the current directors are white men. He argued that this lack of diversity made it difficult for the board to make informed decisions and to represent the interests of all shareholders.

Illumina, for its part, has tried to downplay Icahn's influence and to portray him as a troublemaker who is out of touch with the company's vision and strategy. They have noted that Icahn's stake in the company is relatively small, and that he has a history of pushing for short-term gains at the expense of long-term value.

Despite these criticisms, Icahn shows no signs of backing down. He has continued to push for changes at Illumina, and has suggested that he may even consider a hostile takeover if the company's management continues to resist his efforts.

For investors in Illumina, this proxy fight could have significant implications. If Icahn is successful in getting his own slate of directors elected, the company's strategic direction could shift dramatically. If he fails, however, the company's current management will likely continue on its current course.

Either way, this battle highlights the tensions that can arise between large shareholders and the companies they invest in. While shareholders like Icahn may have different visions for the company than its management, they also have a right to have their voices heard and to push for change when they believe it is necessary.

Ultimately, the outcome of this proxy fight will depend on the views of Illumina's other shareholders, who will have to decide whether they agree with Icahn's criticisms or believe that the company is on the right track. Whatever the result, however, it is clear that the battle between Icahn and Illumina is far from over.

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