Hologic adopts poison pill after Icahn reports stake

Thu Nov 21, 2013 11:03am EST
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(Reuters) - Activist investor Carl Icahn disclosed a 12.63 percent stake in medical device maker Hologic Inc (HOLX.O: Quote), prompting the company to adopt a shareholder rights plan to protect itself from hostile takeovers.

Shares of Hologic, which makes screening tests for cancer and other diseases, rose 3 percent in late morning trading.

Icahn, who has a track record of taking big stakes in companies and pushing for management change, said in a filing with the U.S. Securities and Exchange Commission that he believed Hologic's shares were undervalued.

He also said he would consider discussing with Hologic's management the possibility of board representation and ways to improve shareholder value.

Icahn's move into Hologic is the first time that the billionaire investor has taken a stake of more than 5 percent in a healthcare company since his former top healthcare deputy, Alex Denner, resigned in late 2012, according to a Reuters review of Icahn's 13D filings.

Denner, who now runs activist hedge fund Sarissa Capital Management LP, was integral in a number of successful activist campaigns alongside Icahn, including pushing for the eventual sale of biotechnology companies Genzyme Corp, MedImmune LLC and ImClone Systems.

Hologic's shares have fallen 3 percent since November 11, when the company forecast lower-than-expected revenue for fiscal 2014.

A source familiar with Hologic, who declined to be named because he is not permitted to speak to the media, said any push to sell the company could result in its break-up.

"If Icahn pushes for a sale of the whole company, he might have a tough time," he said. "(I'm) not sure who would buy the whole thing. This could end up in breaking the company up."   Continued...

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