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Illumina Shareholder Ousts Board Chair, CEO Survives Proxy Fight With Carl Icahn

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Illumina Shareholder Ousts Board Chair, CEO Survives Proxy Fight With Carl Icahn

(CTN News) – A biotech company’s board chair is ousted. Thompson booted by shareholders. Illumina’s spokesperson said a new chair will be selected soon.

The board of directors of the company urged shareholders to remove Francis deSouza, the company’s CEO, as well as Thompson from the board of directors. As a result of the proxy fight, DeSouza won the election.

In addition, the shareholders voted to install Andrew Teno, one of Icahn’s three board nominees, who is a portfolio manager at Icahn Capital LP, Icahn’s company that manages investments.

This vote was announced after Illumina’s annual meeting, marking a decisive end to a proxy fight that had lasted two months between Icahn and the company over a controversial acquisition that the company was contemplating.

According to the company’s statement, Thompson had been a valuable member of the Illumina team for many years, and his executive and business experience was deeply valued by the company.

There was a recommendation from Institutional Shareholder Services earlier this month to back Teno on behalf of Illumina shareholders.

As part of his proposal, Icahn proposed two other candidates for the position of director who are either former or current employees of the San Diego-based company Illumina.

In a statement, Illumina said the vote is a blow to the company, which has claimed that Icahn’s three nominees lack “relevant skills and experience” and that their appointment would “threaten the progress” of the biotech’s core DNA sequencing business.

Obtaining the Holy Grail has become a battle of wills

Illumina’s executive management and board have been accused by Icahn of failing to provide adequate oversight, particularly in the case of Illumina’s acquisition of cancer test maker Grail for $7.1 billion in 2021.

According to him, the company should unwind the “absurd and questionable” deal and oust deSouza “immediately.”

In response to the executive’s massive pay increase despite a steep drop in the market value of the company, Icahn has slammed him.

Since August 2021, when the company announced it had completed the acquisition of Grail, Illumina’s market capitalization has plummeted to approximately $33 billion from about $75 billion.

As a result of Illumina’s decision to close the deal without approval from antitrust regulators in the United States and Europe, Icahn has been fiercely opposed to the deal for a long time.

The Federal Trade Commission ordered Illumina to divest itself of the acquisition in April over concerns that it would stifle competition and innovation in the industry.

According to the FTC’s decision, its earlier decision to dismiss the agency’s initial challenge to the deal had been reversed by an administrative judge in September.

In the past, the European Commission, the executive arm of the European Union, has also blocked the deal because of similar concerns.

Both orders are being appealed by Illumina and a final decision is expected later in 2023 or early in 2024.

There has been a lot of debate over the company’s acquisition of Grail.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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