Exclusive: Forest braces for third bout with Icahn

Fri Jun 7, 2013 6:33am EDT
 
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By Bill Berkrot and Nadia Damouni

(Reuters) - Forest Laboratories Inc is trying to avert yet another bitter proxy battle with billionaire investor Carl Icahn ahead of its annual investor meeting this summer, according to two sources familiar with the situation.

Icahn, Forest's second-largest shareholder, and the company have been in discussions over the course of the year and talks are ongoing to avoid a third proxy fight in as many years, the sources said.

There is, however, no guarantee of an amicable settlement, they said, and a mid-June deadline for filing a slate of alternative director candidates is fast approaching.

Neither Forest, which is searching for a successor to long-time Chief Executive Howard Solomon, nor Icahn could immediately be reached for comment.

Details of the discussions could not be learned. Icahn's persistence underscores why in many boardrooms he is still regarded as one of the most feared activist investors.

He has been highly critical of Forest leadership in recent years, arguing that the company in which he holds an 11.5 percent stake has been badly managed and underperforms industry peers.

Icahn has criticized the U.S. drugmaker for being ill-prepared to generate future growth in the face of looming generic competition for two of its biggest selling products - the antidepressant Lexapro and the Alzheimer's treatment Namenda - and for numerous warnings the company received from U.S. health regulators related to marketing practices of its drugs.

His campaign against the company has met with limited success. Last year's proxy battle, for example, ended with just one of Icahn's four nominees being elected to the board - Pierre Legault, the former chief financial officer of OSI Pharma.   Continued...

 
Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East