Illumina should spin off Grail, activist Carl Icahn says
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Illumina (NASDAQ:ILMN) should spin off Grail as regulators in European Union have moved to block the acquisition, billionaire activist Carl Icahn said. 
Icahn, who announced on Monday that he's starting a proxy battle with gene-sequencing company, said Illumina (ILMN) needs to spin off Grail because the company can't sell it now because it would create a large tax bill and it would be "difficult," Icahn said in an interview on CNBC.
"What I think should be done is they spin it in a way with a rights offering," Icahn explained. "So if you're a shareholder you've suffered a lot so you can sell the rights to somebody who wants to buy it or you can exercise your rights and be part of Grail."
Icahn's comments come after Illumina (ILMN) jumped 17% on Monday after Icahn said he plans to nominate three directors for Illumina's board, arguing that the DNA sequencing company has been continuing its planned purchase of Grail even as regulators attempt to block it. 
Illumina on Monday said it had multiple conversations with the Icahn, though he was "explicit and unyielding" in his demand that "any resolution should give him outsized influence and control."
Icahn said on CNBC that he didn't demand the Grail spin in his private discussions with Illumina (ILMN).
Icahn also claimed in a letter to Illumina's (ILMN) board on Monday that the company is vastly overpaying for Grail. Icahn highlighted that Illumina has to pay $800 million in operating costs, but has no control Grail and can't realize any synergies from the purchase.
"I think they overpaid like crazy," Icahn said. 
In December, the European Commission ordered Illumina (ILMN) to divest Grail three months after an EU veto of the $7.1B acquisition on antitrust grounds and concerns about the impact on innovation.
"This company is going to bleed and bleed and bleed, looking ahead, if they don't get rid of this albatross," Icahn said. "It's not an albatross to other people that have money to take this company and make it work, but it's an albatross to these guys because the EU will not let them have this."
Illumina (ILMN) said in its response to Icahn that it's moving quickly to reach a resolution with the European regulators, with divestiture work already underway.