Activist investor Carl Icahn disclosed a 12.63 percent stake in medical device maker Hologic Inc, prompting the company to adopt a shareholder rights plan, or "poison pill", to protect itself from hostile takeovers.
Shares of Hologic, which makes screening tests for cancer and other diseases, were up 3 percent in afternoon trading.
Icahn, who has a track record of taking big stakes in companies and pushing for management change, said in a filing that he would consider discussing with Hologic's management the possibility of board representation and ways to improve shareholder value.
The one-year "poison pill", which has a 10 percent trigger, will not affect Icahn's holding, but his interests will not be able to add shares without triggering the plan.
"Poison pills" are designed to stop hostile takeover attempts by triggering the issue of new shares that dilute the holdings of investors who exceed a set threshold.
"The poison pill is basically useless … if Icahn gets people on the board in March, then the rights plan is going to be canceled," ISI Group analyst Vijay Kumar said.
"Based on these developments we are increasing our probability of strategic action (sale/restructuring) to 100 percent and in turn lower our probability of things remaining the status quo to zero," Kumar told Reuters.
Hologic has been struggling with cuts in hospital spending and a lack of reimbursement for one of its mammography systems. In July, the company reinstated its former chief executive, Jack Cumming, in an attempt to turn around its fortunes.
Cumming, who was CEO of the company from 2001 until 2009, has been entrusted to undertake a full assessment of the company's businesses and review the integration of Hologic's $3.75 billion acquisition of Gen-Probe Inc.
The deal, which gave Hologic access to Gen-Probe's diagnostics tests for blood diseases, transplant compatibility and sexually transmitted diseases, was widely believed to be an expensive deal for Hologic.
RBC Capital Markets analyst Glenn Novarro said a new management team would be a positive for the stock.
"(However) we believe the fundamental outlook is still challenged and there are no quick fixes to enhance shareholder value," he wrote in a note.
Novarro said Hologic's management has been criticized for destroying shareholder value through overpaying for large acquisitions such as Cytyc in 2007 and Gen-Probe in 2012.
Hologic bought Cytyc Corp in 2007 for about $6.2 billion, adding products for cancer screening and women-health uses.
Hologic's shares have gained just 5 percent since the announcement of the Gen-Probe deal.
Icahn's move into Hologic is the first time that the billionaire investor has taken a stake of more than 5 percent in a healthcare company since his former top healthcare deputy, Alex Denner, resigned in late 2012, according to a Reuters review of Icahn's 13D filings.
Denner, who now runs activist hedge fund Sarissa Capital Management LP, was integral in a number of successful activist campaigns alongside Icahn, including pushing for the eventual sale of biotechnology companies Genzyme Corp, MedImmune LLC and ImClone Systems.
Icahn's move follows Jana Partners Llc, another activist investor, disclosing a 1.32 percent stake in Hologic on September 30, according to Thomson Reuters data.
"With several activist investors now involved in the company, we believe this could speed up the timeline of potential asset divestitures and debt paydown and could lead to a more rapid departure of Hologic's CEO/CFO," Novarro said.
Hologic's shares have fallen 3 percent since November 11, when the company forecast lower-than-expected revenue for fiscal 2014.
The company's revenue has missed estimates for six of the last seven quarters.
A source familiar with Hologic said any push to sell the company could result in its break-up. The source declined to be named because he is not permitted to speak to the media.
"If Icahn pushes for a sale of the whole company, he might have a tough time," he said. "(I'm) not sure who would buy the whole thing. This could end up in breaking the company up."
In an interview on Monday with Reuters as part of its Global Investment Outlook, Icahn described his style of activism as relatively hands-off compared with that of some peers.
"We get involved on the board," Icahn said. "We don't micro-manage and, interestingly, we get invited back because we're not a disturbance or a disruption."
Hologic has a market capitalization of about $6 billion. Its shares trade at a multiple of 16.4 times forward earnings, compared with an average of 21.4 times for healthcare equipment and supplies companies, according to Thomson Reuters data.
The stock was trading at $22.77 on the Nasdaq on Thursday.
(Editing by Joyjeet Das and Saumyadeb Chakrabarty)