Carl Icahn seeks to bring Illumina’s former CEO back – WSJ
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Activist investor Carl Icahn who has launched a proxy battle against Illumina (NASDAQ:ILMN) over the gene sequencing firmâs decision to close its ~$7B GRAIL acquisition despite regulatory concerns, wants the companyâs former CEO Jay Flatley back, The Wall Street Journal reported Wednesday.
Mr. Flatley, who led San Diego-based Illumina (ILMN) from 1999 â 2016 before current CEO Francis deSouza took over, served the company as executive chairman until 2019 and only as chairman until May 2021.
While the former CEO was part of the board that inked the deal to acquire the cancer test developer in 2020, he was no longer a board member when Illumina (ILMN) closed the acquisition in 2021 despite ongoing antitrust concerns.
âThey should bring Flatley back as CEO immediately,â the billionaire investor said in an interview. âHe obviously knows the company and did a good job with it,â Icahn added without specifying whether he has been in talks with Mr. Flatley about a potential return to leadership.
âThis is an urgent moment for the company and they need someone who knows what theyâre doing to fix the situation.â
His remarks come at a time when the European Commission wants the company to unwind the deal and let GRAIL operate as an independent company.
While Illumina (ILMN) has said it is advancing as swiftly as possible to define âthe conditions and options of a potential divestiture,â the company is still appealing the EU authority to prevail over the deal.
Citing the current macro environment, Icahn says that the company cannot afford to run GRAIL which lost over $300M last year.
âThey donât have the money, and especially in this environment, they wonât be able to keep funding this money-losing business,â he said.
âI hate to say this, but this company is on a road downhill like the Eastman Kodaks of the world if they donât get rid of Grail and focus on their core business,â Icahn added, referring to the photography company that went into bankruptcy after being an industry pioneer.
Mr. Icahn thinks that a rights offering will provide the best method for Illumina (ILMN) to liquidate GRAIL.
âThe best part of a rights offering is you find a way to fund Grail without adding debt to Illumina,â he said, noting, âitâs a way to allow Illumina shareholders to get the benefit of buying Grail at a possible bargain price or sell their rights and get a benefit in this fashion.â
Icahn, who seeks three members to Illuminaâs (ILMN) board, previously said that his nominations will âwill bring a dose of sanity to Illuminaâs âRip Van Winkleâ boardroom and help to clean up the GRAIL disaster.â