In a stark turnabout from last year, Forest Laboratories ($FRX) and cantankerous investor Carl Icahn are making nice ahead of the company's annual shareholder meeting.
The company today said that Forest would add another Icahn ally to its board of directors, and Icahn spoke politely about retiring CEO Howard Solomon, a man who last year he savaged, calling into question his ethics and his management ability and accusing him of treating the company as a "dynasty." The move will avoid another proxy fight by Icahn, who for two years has been battling with the Forest board and management.
In a statement reported today by Bloomberg, Icahn said, "I have spoken to Howard Solomon several times in the last month and do not believe that our views concerning Forest are that far apart. In light of Forest's attractive emerging product line, we both believe that we can work together to bring major changes that will enhance shareholder value." He said he would vote his shares with the board.
Forest said in a statement it would add to its board Vincent Intrieri, 56, who will help with the succession, planning for the 85-year-old Solomon's end-of-year retirement. Intrieri has been an Icahn ally for 15 years and sits on the boards of a number of companies, like Navistar International, in which Icahn has invested. Icahn last year got Pierre Legault elected, one of four people he put up for the board.
One of Icahn's biggest complaints was his suggestion that Solomon would get the board to appoint his son David as his replacement as CEO. There has been nothing said about that this year. Some sources have suggested that Forest might now replace Solomon with Bausch + Lomb CEO Brent Saunders, a Forest board member, whose company has been acquired by Valeant Pharmaceuticals ($VRX). While the company's earnings are still suffering from generic competition to former blockbuster Lexapro, its stock price has been up in the last 12 months.
- read the Bloomberg story