The renowned activist investor, Carl Icahn, has filed a lawsuit against the board of directors of Illumina (NASDAQ: ILMN), a leading genetic testing company, alleging a breach of their fiduciary duties. The complaint, available in a sealed form, underscores Mr. Icahn’s concerns regarding Illumina’s acquisition of cancer diagnostic test manufacturer Grail.
While the publicly accessible version of the complaint lacks specific details, Mr. Icahn clarified during his speech at the 13D Monitor Active-Passive Investor Summit in New York on Tuesday that the legal action stems from concerns surrounding Illumina’s recent completion of the Grail acquisition. This acquisition had garnered significant attention earlier this year when Mr. Icahn led a successful proxy fight against Illumina, advocating for the deal’s unwinding, citing substantial financial implications for investors.
However, the European Union issued an order earlier this month mandating that Illumina divest itself of Grail, a move prompted by regulatory concerns.
Illumina has since disclosed that they are carefully reviewing the legal complaint but has yet to provide further comment in response to inquiries from Reuters.
In a statement released on Wednesday, the 87-year-old Icahn explained that, until now, he had never found it necessary to take such action against a company’s board of directors. He stated, “I have done so today in light of, among other things, the board’s unconscionable and egregious actions relating to closing the acquisition of Grail without regulatory approval, thus putting Illumina, a great company, in harm’s way.”
This legal development occurs in the midst of a tumultuous year for Illumina. The company’s stock price has witnessed a 36% decline since January, and its board underwent changes, including the replacement of the CEO, shortly after Mr. Icahn secured a board seat.
Illumina’s purchase of Grail in 2021 had encountered significant opposition from both U.S. and European antitrust regulators.
In response to the European Commission’s order, Illumina has expressed its intention to divest Grail within the next 12 months if it fails to prevail in its legal challenge.
Following these events, Illumina, based in San Diego, recently appointed Jacob Thaysen, a former executive at Agilent Technologies (NYSE: A), as its CEO. Carl Icahn expressed his continued confidence in the company’s long-term potential and its newly appointed CEO, Jacob Thaysen, as well as the dedicated workforce at Illumina.
