Gene Sequencing Firm Illumina Escapes Carl Icahn's Second Proxy Battle Amid Grail Divestment Efforts

Activist investor Carl Icahn has opted against pursuing a fresh challenge to Illumina Inc’s ILMN board, a move that spares the U.S. gene sequencing company from facing its second proxy battle in consecutive years. 

Previously, Icahn had expressed intentions to remove additional directors from Illumina’s board, attributing the company’s substantial market value decline and the ill-fated $7.1 billion Grail acquisition to mismanagement by the existing board members. 

Citing sources familiar with the matter, Reuters highlighted that Icahn’s decision to forgo another proxy contest stemmed from Illumina’s efforts to address antitrust concerns by divesting Grail.

Last year in December, Illumina agreed to divest cancer diagnostic test maker Grail as the companies battled with the U.S. and European antitrust regulators for almost three years after announcing the acquisition.

Despite shelving the proxy contest, the 88-year-old billionaire investor remains committed to his legal action against Illumina’s board, alleging breaches of fiduciary duties in connection with the Grail acquisition. 

In December, Carl Icahn said he plans to oust legacy conflicted directors at Illumina, laying the groundwork for a second board challenge at the San Diego gene-sequencing company only months after shareholders elected one of his director candidates.

Illumina reportedly clashed with EU antitrust regulators, alleging an overreach in their investigation into the Grail acquisition.

A credit ratings agency, Fitch, estimated Grail’s annual operating losses to hover around $600 million, primarily driven by extensive investments in product development and regulatory clearance endeavors. 

In its fourth quarter 2023 earnings release, Illumina said that while it continues to move as quickly as possible to resolve GRAIL, the company is focusing its financial outlook on Core Illumina, as the specific timing and impact of the Grail divestment remains uncertain.

Price Action: ILMN shares are down 0.21% at $132.43 on the last check Wednesday.

Photo via Wikimedia Commons