Feb 18 After a nearly three-year campaign at
Forest Laboratories Inc that spanned two proxy battles
and the ousting of a chief executive, billionaire activist
investor Carl Icahn has once again ended up on top.
The proposed $25 billion acquisition of Forest Labs by
generic drug maker Actavis Plc is the biggest deal yet
to emerge from Icahn's many forays into healthcare.
Icahn, Forest's second-largest shareholder, proclaimed the
deal to be "yet another validation of the activist investment
philosophy" and said the company's shareholders had realized a
209 percent return since his earliest stake was disclosed in
"He's a smart and astute investor and he gets the strategic
rationale of this deal," Forest Labs Chief Executive Brent
Saunders said of Icahn. "My sense is he will continue to be a
good shareholder, albeit in a smaller position."
Saunders and Actavis CEO Paul Bisaro described in an
interview how the deal came together quickly after they met
during a social event at a J.P. Morgan healthcare conference in
January. They sealed the agreement this weekend, helped by
snowstorms that confined their teams to a New Jersey hotel.
Meanwhile, Icahn kept tabs on the discussions from his
vacation home in Miami.
"I met with Brent a number of times to discuss what was
happening," Icahn said in a telephone interview. "He even flew
down to Florida while I was there to discuss the deal and
The agreement wraps up a campaign that began in 2011 and led
to the departure of CEO Howard Solomon in 2013 after more than
35 years at the company's helm. And it comes after some of
Icahn's more recent campaigns have had mixed results.
Earlier this month Icahn gave up on his attempt to push for
more share buybacks at Apple Inc after the iPhone maker
increased its repurchase program, though not to the level that
Icahn had demanded.
News of the Forest deal increased the value of Icahn's
Forest holdings by nearly $650 million over the weekend, based
on the number of shares held at the end of December, and
generated a profit for him of roughly $1.7 billion.
Over the past decade, Icahn has been involved in the sale or
turnaround of companies ranging from ImClone Systems, which was
sold to Eli Lilly & Co for $6.5 billion in 2008, to
Genzyme, which was acquired by Sanofi in 2011 for $20
Publicly available data suggests that Icahn's healthcare
investments, excluding Forest, have generated a return of about
$2 billion over the past eight years.
Much of that success was driven by his former healthcare
lieutenant, Alexander Denner, and by Richard Mulligan, an
internationally recognized genetics professor at Harvard
University and frequent Icahn board nominee.
Denner and Mulligan formed their own activist healthcare
fund, Sarissa Capital Management, last year, but Icahn said he
has no plans to stop investing in healthcare companies.
"We're opportunistic," he said. "I look for very undervalued
companies that are poorly managed. The industry isn't that