April 9 (Bloomberg) -- Amylin Pharmaceuticals Inc. was sued by billionaire investor Carl Icahn over a corporate bylaw that hamstrings investors from pursuing a proxy fight over a rejected a $22-per-share takeover offer by Bristol-Myers Squibb Co.
Icahn contends that Amylin’s directors should be barred from enforcing a rule requiring advance notice of candidates for board seats since the drugmaker failed to make Bristol-Myers’s bid public before the filing deadline. Amylin officials turned down the $3.5 billion offer in February, two people familiar with the bid told Bloomberg News on March 28. The company has never confirmed the offer.
Amylin directors have unfairly “rejected a request to reopen the time for stockholders to provide notice” that they seek to nominate candidates for board seats, Icahn, Amylin’s third-largest shareholder, said in the lawsuit filed today in Delaware Chancery Court.
Icahn, who has targeted at least seven drug companies in the past five years, threatened to start a proxy fight over the Amylin board’s rejection of the Bristol-Myers offer and urged the drugmaker to pursue a sale.
“We believe Mr. Icahn’s lawsuit is without merit,” Alice Izzo, an Amylin spokeswoman, said in an e-mailed statement. “Amylin’s board is fully aware of its fiduciary duties and is committed to always acting in the best interests of all stockholders.”
Amylin declined 1.7 percent to $23.72 at 4 p.m. New York time. The shares are up 54 percent since March 27, the day before Bristol-Myers’s bid was reported.
Icahn has been critical of San Diego-based Amylin’s directors, saying in an April 4 letter that the board is “dysfunctional and is not operating in a manner that enhances shareholder value.”
He cited Amylin’s public offering of 13 million common shares and its issuance of stock options to company executives at $16 a share.
Icahn, who held 14.4 million Amylin shares as of Dec. 31, gained board representation in 2009 after running a proxy contest in which he criticized the company’s ability to return value to shareholders with the diabetes drug Byetta.
Icahn contends Amylin officials set a Jan. 25 cutoff for submitting names of potential candidates for company board seats. The deadline expired before news about the Bristol-Myers offer broke, the billionaire said.
Amylin investors are being unfairly denied the opportunity to decide “whether to elect a board that will actually pursue a sale of the company or whether to re-elect the current board, which has refused to pursue such a transaction,” Icahn’s lawyers said in the suit.
“To afford stockholders this choice, the advance-notice bylaw” should be waived, Icahn’s attorneys added.
Icahn’s lawyers noted that Amylin executives haven’t officially set the company’s annual meeting date, but are telling “brokers that it intends to hold the meeting May 11,” according to the suit.
Amylin’s 11-member board is elected annually, company officials said in an April 2011 filing with the U.S. Securities and Exchange Commission.
The case is Icahn Partners LP v. Amylin Pharmaceuticals Inc., CA 7404, Delaware Chancery Court (Wilmington).
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