It's high noon for Carl Icahn and Forest Laboratories ($FRX). As the company's annual meeting looms Wednesday, both sides are firing their final shots. Icahn, the activist investor who's had many a proxy-fight showdown with drug companies, is accusing the company of hiding key info from shareholders. And Forest, in essence, is calling him a liar.
"We regret that Mr. Icahn is making false and misleading statements less than a week before our annual meeting in an egregious and desperate attempt to manipulate the results of the election," CEO Howard Solomon wrote in a letter to investors.
Icahn says that one of Forest's licensing deals--with Cypress Bioscience--includes a provision that would protect it from a hostile takeover. After petitioning a Delaware court to allow him to publicize the documents, Icahn said, "Forest flatly refuses to let us tell other shareholders what those agreements say about a change of control."
What Forest has disclosed is a proposed settlement in three shareholder lawsuits. Disgruntled investors sued after the Department of Health and Human Services tried to exclude Solomon from doing business with federal programs--an effort that failed. The suits accused Forest of misrepresenting its executive-pay program and overpaying Solomon in the midst of the company's declining profits and legal problems.
In the proposed settlement, Forest's board would change executive-pay policies and adopt measures "related to conflicts of interest regarding board discussions." It didn't volunteer specifics, The Wall Street Journal notes.
The settlement--and its timing--are important because governance and pay are two issues Icahn has raised to support his slate of four board nominees. Forest's directors are too entrenched and too chummy with management, Icahn claims; Forest says it has taken steps to make its board more independent. Stay tuned for Wednesday's vote.
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