This article is more than 5 years old. Information may no longer be current.
Visx looks ahead after financier pulls out
Corporate raider Carl Icahn has sold his chunk of shares in the company after years of trying to gain control. Now Visx, with recent FDA approval in hand, is moving on without him.
The past few weeks have seen big changes for Visx Inc., which bought back 3.5 million shares of its own stock after a major shareholder sold his nearly 12% stake in the company.
The flurry of transactions came just days after the Santa Clara, Calif.-company announced it had been granted regulatory approval for its CustomVue laser vision correction system by the Food and Drug Administration.
Corporate financier Carl Icahn — who along with his affiliates held some 6 million shares, or 11.7%, of the company — sold nearly all his stake May 28 after losing a proxy battle to replace one of the Visx, Inc. board members with his own handpicked nominee.
According to Elizabeth H. Davila, President and CEO of Visx Inc., shareholders overwhelmingly voted down Mr. Icahn’s bid to place someone on the board.
“The shareholders have spoken and have said: ‘No, we do not want you to have a presence on our board,’” Ms. Davila told Ocular Surgery News.
She said that Visx’s subsequent decision to repurchase 3.5 million shares, while prompted by what happened with Mr. Icahn, is in keeping with the company’s gradual effort since 1997 as part of a board of directors’ authorization to repurchase shares. Mr. Icahn lost about $20 million of his original $140 million investment in the company, according to media reports.
Visx stock fell 2.6% to $17.65 after news of Mr. Icahn’s sale was made public. Yet Ms. Davila said Visx stock has more than doubled in price over the past 3 months, and that the recent dip does not reflect the steady upward trend the company has been experiencing. She attributed this growth to investors’ anticipation of the CustomVue approval.
“It’s amazing when you think that we were at around $8 (per share) 3 months ago and now we’re at $17,” Ms. Davila said. “We have received the benefit of the investors’ confidence in CustomVue and that is what has driven the stock price up.”
The Visx system is the second wavefront laser system to be granted FDA approval. It takes its place alongside Alcon’s CustomCornea wavefront system, which received U.S. regulatory approval in October 2002.
The CustomVue system uses the WaveScan diagnostic system, which is Visx’s wavefront software. The FDA granted approval for WaveScan diagnosis and CustomVue wavefront-guided correction for the treatment of myopia and astigmatism.
Ms. Davila called results thus far with CustomVue “exceptional.”
“This is our opportunity to take a new message of safety and efficacy to the consumers and we anticipate that we will bring more patients in,” she said.
Mr. Icahn has long publicized his belief that Visx would be better off if bought by a larger company with a broader product base.
‘The right kind of buyer’
Reacting to the news of the CustomVue approval, Mr. Icahn said he thinks the company should maximize its market potential by seeking “the right kind of buyer.”
“I do not believe that Visx alone, without combining with a larger, more well-capitalized company, can take advantage of the market potential available to it,” Mr. Icahn said in a written statement issued May 27.
Since November 2000, the well-known corporate raider had tried unsuccessfully on several occasions to gain a presence on the board. He expressed dismay that his nominee this time, investment analyst Keith Meister, was not elected.
“I still firmly believe that shareholders are best served when shareholder nominees are included on boards of directors and that the addition of Mr. Meister would have provided an important catalyst for an acquisition of the company,” he said in the statement.
However, Mr. Icahn noted that he is pleased that the Visx board decided to implement a proposal — called a “chewable pill” — that will enable investors to vote on cash tender offers made to the firm.
Taking credit for the amendment to the shareholder-rights plan, Mr. Icahn said it should “not take a proxy contest for shareholders to secure from entrenched management something that should always be within their absolute control, the right to decide for themselves whether to accept a tender offer for any and all of their stock.”
Ms. Davila, for her part, said the policy change had nothing to do with Mr. Icahn.
“This is not a concession to Mr. Icahn, as he has suggested. He is trying to take credit for it, but the fact is that this was not a response to him at all,” she said. “Going from a poison pill to a chewable pill says to investors that if they have any doubt that we would bring a good offer to them, we are removing that doubt with this move.”
Asked if the move means Visx is now more receptive to a buyout or merger, Ms. Davila said nothing has changed.
“Visx as a company is always open to a good business combination, and we always have been. If a good, bona fide business combination presents itself, we will certainly consider it,” she said.
Ocular Surgery News attempted to contact Mr. Icahn to determine if he has any more plans to buy back into Visx, but he was not available for comment.
For Your Information:
- Elizabeth H. Davila, president and CEO of Visx, Inc., can be reached at the company’s headquarters, 3400 Central Expressway, Santa Clara, CA 95051-7122; (408) 733-2020; fax: (408) 773-7278; e-mail: ir@visx.com; Web site: www.visx.com.