Forest Laboratories Inc., a drugmaker that has been the subject of two proxy fights led by investor Carl Icahn, adopted a shareholder rights plan to protect against a takeover effort.
The plan will be triggered if a person or group acquires 12 percent or more of Forest’s common stock and will expire in a year unless ratified by the shareholders, the New York-based company said today in a statement.
Forest’s shareholders on Aug. 15 elected one of four candidates proposed by Icahn in his second effort in two years to run a slate for the company’s 10-member board. Icahn, the second-largest shareholder with more than 11 percent of the company’s stock as of Aug. 24, has said the drugmaker didn’t adequately prepare for the loss of patent protection on its top-selling drug, the antidepressant Lexapro, and questioned the succession plan for Chief Executive Officer Howard Solomon.
“After concluding a second proxy contest during which he repeatedly -- and erroneously -- disparaged Forest’s business model and growth prospects, Mr. Icahn increased his already significant position in Forest with rapid open market purchases,” Solomon said today in the statement. “In light of these recent developments, the Board has adopted a stockholder rights plan that is designed to ensure that all of Forest Laboratories’ stockholders receive fair and equal treatment in the event of any proposed takeover of the Company.”
Icahn didn’t immediately return a call seeking comment on Forest’s plan.
The two sides have traded barbs since Icahn announced his intention to nominate directors in May. The investor criticized the loss of shareholder value as Forest’s stock, which has declined to $34.69 at the close of trading in New York today from a high of $77.59 in 2004. Icahn has also said he planned to investigate stock sales made by Solomon.
Forest countered that Icahn has ignored the progress made in the last year, such as bringing new drugs to the market.