Icahn Solicits Independent Forest Directors Support, In Vain - Update

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7/12/2012 8:05 PM ET

The spat between Forest Laboratories Inc. (FRX: Quote) CEO Howard Solomon and Carl Icahn took a more acerbic turn, as the activist investor sought the support of independent directors to help get his nominees on board.

Icahn is Forest's second largest shareholder with a 9.92 percent stake and is vying to instal four of his nominees to the Forest Board. The result of which has been a prolonged proxy fight.

Icahn has left no stone unturned in censuring the company for its poor performance and has expressed fears about its long term prospects.

In the past few months, Icahn has in vain tried to coax Solomon into allowing him board seats. This prompted the activist investor to make a direct approach with independent board members.

In a communique to independent directors early Thursday, Icahn said his pleas have been futile and does not see an amicable solution to the proxy fight. It was also suggested that Solomon may have hid from the board Icahn's earlier preference to avoid a fight by pushing two of his nominees to the board.

Icahn also reiterated the imminent patent expirations for key drugs, and that the current pipeline will not suffice to recompense for them. Forest in March lost patent protection for its anti-depressant drug Lexapro that accounted for sizable sales.

Meanwhile, Forest's independent directors rebutted Icahn's charges. They indicated being kept informed on the developments between Solomon and Icahn and that the decision to reject his nominees had the board's complete backing.

One among Icahn's preferred nominees is Eric Ende, who served as president of Ende BioMedical Consulting Group and was a former biotechnology analyst at Merrill Lynch. Ende was among those nominees in Icahn's failed bid last August to make it the Forest board.

Icahn has also traded barbs with Solomon over his attempts to instal his son David Solomon as Forest chief executive without a proper review. But Forest has dispelled that charge and recently hired search firm Spencer Stuart to help find a suitable replacement for Solomon.

FRX closed Thursday at $35.32, up 0.03%, on the NYSE.

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by RTT Staff Writer

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