Illumina Inc. Elects Carl Icahn's Board Member Amidst Shareholder Battle.

Introduction:

In a recent development, Illumina Inc., a prominent DNA-sequencing company, announced the election of a new board member nominated by activist shareholder Carl Icahn. The victory serves as a partial win for Icahn, whose investment firm, Icahn Enterprises LP, is currently facing criticism from short-seller Hindenburg Research. The newly elected board member, Andrew Teno, a portfolio manager at Icahn Capital, will replace Chairman John Thompson, who had been on Illumina's board since 2021. While Icahn succeeded in getting Teno on board, his attempts to remove Illumina's CEO, Francis deSouza, from the board were unsuccessful.

Shareholder Battle and Icahn's Challenges:

The appointment of Andrew Teno to Illumina's board comes at a time when Icahn Enterprises LP is under attack by Hindenburg Research. In a report released earlier this month, Hindenburg Research claimed that Icahn Enterprises' value was inflated and raised concerns about its dividend payouts, a strategy often employed by Icahn throughout his activist career. This report resulted in a significant drop in Icahn Enterprises' shares, causing a paper loss of $15 billion for Carl Icahn's net worth.

In response to the report, Icahn criticized Hindenburg's motives but did not directly address the allegations. He mentioned having other priorities, including the proxy battle with Illumina. Additionally, Icahn Enterprises reported that it had been contacted by the US Attorney's Office for the Southern District of New York regarding inquiries about some of its units.

Icahn's Objectives and Nominees:

Icahn's campaign for board seats at Illumina began in March, with his primary criticism directed at the company's board and management for selling and subsequently repurchasing cancer-detection firm Grail Inc. at a higher price. He also expressed dissatisfaction with Illumina's decision to proceed with the transaction despite opposition from European regulators.

Andrew Teno was one of the three nominees put forth by Carl Icahn for the Illumina board. The other two nominees were Vincent Intrieri, the founder of VDA Capital Management, and Jesse Lynn, the general counsel of Icahn Enterprises. Proxy advisory firm Institutional Shareholder Services recommended supporting Teno's election and withholding support for Chairman John Thompson, while Glass Lewis & Co. recommended two of Icahn's nominees.

Settlement Attempts and Final Outcome:

During negotiations between Illumina and Icahn, a potential settlement was discussed, which would have granted Icahn one board seat and allowed his input on the selection of two additional board members, thereby expanding the board to 11 individuals. However, the talks faltered when Icahn requested the appointment of his two nominees alongside an independent director.

Andrew Teno's existing directorships include positions on the boards of Crown Holdings Inc. and Southwest Gas Holdings Inc.

Conclusion:

The election of Andrew Teno as a director on Illumina's board marks a partial victory for activist shareholder Carl Icahn in his ongoing battle with the company. With Teno's appointment and the re-election of the other eight directors, Illumina aims to foster productive and collaborative engagement. As Icahn Enterprises LP deals with the fallout from Hindenburg Research's report and investigations by the US Attorney's Office, the outcome of the proxy battle at Illumina serves as an important development in the evolving dynamics between Carl Icahn and the companies he targets.