Forest, Icahn trade barbs as proxy fight continuesThe Associated Press
NEW YORK -- Forest Laboratories Inc. and billionaire investor Carl Icahn traded new accusations Thursday as Icahn said the company is rejecting his ideas out of hand, and Forest said Icahn's nominees to its board are not qualified.
In a letter filed with the Securities and Exchange Commission, Icahn said that before nominating four candidates to the Forest board of directors, he suggested the company add only two of his current candidates, Eric Ende and Daniel Ninivaggi, to the board. He said CEO Howard Solomon quickly turned down that idea, and Icahn suggested the board could be expanded so other directors would be replaced. Icahn said that offer was also dismissed.
Icahn later nominated Ende, Ninivaggi, and two other candidates for replaces on the board, where they could replace current members of the board. Shareholders will elect directors at the company's upcoming annual meeting.
The activist investor said he is entitled to representation on the board. He is the second-largest shareholder in Forest with a 9.9 percent stake in the company. Icahn said the company needs a better strategic direction: Its earnings are in decline because its antidepressant Lexapro has lost patent protection, and its other top seller, the Alzheimer's disease drug Namenda, will lose patent protection in 2015. Icahn said two of its newer products are not selling as well as expected.
In a press release, Forest said the entire board considered all of Icahn's suggestions. The company said it declined to support Icahn's nominees because its own candidates are more qualified. It said its shareholders did not support Ende as a candidate for the board of directors in 2011, and said Ninivaggi is "a salaried Icahn employee with absolutely no relevant experience."
Icahn also conducted a proxy contest in 2011, and shareholders ultimately rejected all four of his candidates and elected the candidates Forest had nominated.
Shares of Forest Laboratories gained a penny to $35.32 Thursday and were unchanged in aftermarket trading.