Icahn steps up attack on Forest Labs

Mon Jul 2, 2012 6:18pm EDT

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.

Credit: Reuters/Chip East

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(Reuters) - Activist investor Carl Icahn said on Monday he intends to look into disclosures that Forest Laboratories Inc FRX.N CEO Howard Solomon made before selling stock in the drugmaker over the years, launching the latest salvo in his proxy fight against the company.

In a letter to Solomon, Icahn said the company's long-time CEO had sold more than $500 million worth of Forest stock several years ago "at prices substantially higher than today's price."

"Those sales now look to me like a savvy bet against the prospects of a company that was not prepared to meet the calamitous events that would befall it several years in the future when Lexapro went off patent," Icahn said.

Icahn has said he will nominate four people to the company's board, restarting a proxy fight that he lost last year.

"I hope you will avoid a contentious and costly proxy fight and give your second largest shareholder board seats," he wrote in the letter.

Icahn later appeared on cable news channel CNBC, continuing his public criticism of Forest management and Solomon's leadership in particular, while touting his own past involvement with other healthcare companies, such as Biogen Idec (BIIB.O) and Amylin Pharmaceuticals Inc AMLN.O. Amylin on Friday agreed to be purchased by Bristol-Myers Squibb Co (BMY.N) at a hefty premium.

"We are not surprised by Mr. Icahn's theatrical display of self-serving rhetoric, but his public rants do not serve any useful purpose," Forest said in a statement, adding that it has always been willing to listen to suggestions from shareholders.

"As we did last year when Forest shareholders decisively rejected his slate, we will respond appropriately to Mr. Icahn in due course," the statement concluded.

Forest shares closed up 80 cents, or 2.3 percent, at $35.79 on the New York Stock Exchange.

(Reporting by Paritosh Bansal and Bill Berkrot in New York; Editing by Bernard Orr)

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