What happens when the activist investor who's been dogging your heels for over a year buys a bigger stake in your company? If you're Forest Laboratories, you adopt a shareholder rights plan.
The company's new "poison pill" plan is triggered if one person or group accumulates 12% or more of its common stock. That threshold isn't an out-of-the-air choice. Carl Icahn disclosed last Friday that he had increased his stake in Forest to 11.2%, Reuters reports.
"After concluding a second proxy contest during which he repeatedly--and erroneously--disparaged Forest's business model and growth prospects, Mr. Icahn increased his already significant position in Forest with rapid open market purchases," Forest CEO Howard Solomon said in a statement.
"In light of these recent developments, the Board has adopted a stockholder rights plan that is designed to ... guard against abusive tactics to gain control of Forest Laboratories," Solomon said.
Icahn declared victory after the Forest proxy election earlier this month, when one of his four board nominees won a seat. He also said he wanted to sit down with Solomon to talk over ideas for improving Forest's prospects. The company's problems could be tackled amicably, he said. Instead, it appears the hostilities continue.
- see the Forest release
- read the Reuters news
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