Genzyme could face Icahn proxy battle

When will Genzyme catch a break? The company has struggled with manufacturing troubles for months while watching competitors jump into the gap left by shortages of its drugs. Yes, Genzyme has had plenty of problems to juggle--and plenty of investors to mollify. But just when it comes to a cease-fire with dissident shareholder Relational Investors, news breaks that Genzyme might be a target for in Carl Icahn's proxy-battle guns.

First the Relational Investors agreement: The private investment fund has 4 percent of Genzyme's stock, and it's been agitating for a seat on the company's board of directors. But Relational will hold off on that demand for now. It has agreed to support the company's board nominees and proposals at this year's annual meeting. But if Relational asks for a seat again this November, Genzyme will appoint Relational's principal and co-founder Ralph Whitworth.

Now, Icahn: Sources tell Reuters that Icahn is mulling a proxy battle there, now that he's won a couple seats on Biogen Idec's board. The deal with Relational appears to be at least partly motivated by the prospect of a proxy fight. With Relational on management's side, Icahn would have to work even harder to win enough votes.

Still, however, plenty of Genzyme investors are dissatisfied, as Reuters points out. Shares are at a five-year low, and there have been calls [1] for the resignation of CEO Henri Termeer (photo [2]). "I think shareholders would be willing to listen if there was talk of a change of management," one major shareholder tells the news service. We'll have to wait and see.

- read Genzyme's release [3] discussing the agreement with Relational Investors
- read the Reuters story [4]
- get the Icahn piece [5], also from Reuters

Related Articles:
Hospira to take on Genzyme products [6]
Genzyme founder calls for CEO change [1]
Icahn has a toehold at Biogen. Now what? [7]