This article is more than 5 years old. Information may no longer be current.
Visx stays intact despite attempted corporate raid
More than a month of sometimes hostile volleys between Visx management and corporate raider Carl Icahn yielded no great change in the end.
Click Here to Manage Email Alerts
SANTA CLARA, Calif. — Since March, Carl Icahn has been waging a press release war with Visx management in an attempt to sway stockholders to elect his slate of directors at the company’s annual stockholder meeting.
However, 3 days before the May 4 stockholder meeting, Mr. Icahn ended his proxy contest to overturn the current Visx board of directors.
At the stockholder meeting, Visx stockholders reelected all five directors who, in turn, elevated president and chief executive officer Elizabeth Dàvila to chairman of the board. Visx stockholders reelected Glendon E. French, John W. Galiardo, Jay T. Holmes, Richard B. Sayford and Ms. Dàvila.
A forest of press releases
Between March 23 and May 4, Mr. Icahn and Visx produced nearly 30 press releases and SEC filings trying to sway stockholders to vote in one direction or another.
The battle started in November and December 2000, when Mr. Icahn sent letters to Mark Logan, then CEO and chairman of Visx, asking him and the board to consider selling the company to a better capitalized company with a broader product base in ophthalmology. The December letter also stated that Mr. Icahn, who now owns roughly 10% of Visx’s stock, was “troubled” by the pending settlement with Bausch & Lomb regarding a patent infringement claim. Mr. Icahn complained that Visx’s patent portfolio was one of the strengths of the company and should not be given away at a cheap price.
On March 23, Mr. Icahn announced he was distributing a proxy ballot to all Visx stockholders. He had hoped that by installing a new board of directors, it would be possible to change the focus of Visx to more actively look for merger partners.
He had already asked the board to consider an open public auction on its own. He stated that if his own slate of directors was elected, he would hold an immediate auction the day of the stockholder meeting.
Published reports named Novartis AG, Johnson & Johnson and Allergan as possible partners for a merger. On April 18, Allergan sent out a press release stating that it had no interest in commenting on the Icahn/Visx situation, but rather that the company remained focused on the continued growth of its specialty pharmaceutical business.
The slate of directors Mr. Icahn attempted to install consisted of himself, the Hon. Jerome M. Becker, Russell D. Glass, Dr. Samuel D. Waskel and Paul J. Zegger.
Mr. Icahn is best known for his corporate attempts of takeovers at Texaco, Trans World Airlines (TWA) and Nabisco. He ran TWA from 1985 until 1993 and attempted to reacquire the company earlier this year, before losing out to American Airline’s parent company AMR Corp.
Previously, Mr. Icahn has served as chairman of the board and a director of Starfire Holding Corporation (formerly Icahn Holding Corporation), a privately-held holding company, and chairman of the board and a director of various subsidiaries of Starfire, including ACF Industries Inc., a privately-held railcar leasing and manufacturing company, since 1982, and ACF Industries Holdings Corp., a privately-held holding company for ACF, since August 1993.
Judge Becker serves as chairman of the New York State Housing Finance Agency, the New York State Affordable Housing Corporation, the New York State Project Finance Agency and the New York State Municipal Bond Bank.
Mr. Glass has been president and chief investment officer of Icahn Associates Corp., a diversified investment firm. Since August 1998 he has also served as vice chairman of Lowestfare.com LLC, an Internet travel reservations company. Since April 2000, Mr. Glass has also served as the CEO of Cadus Pharmaceutical Corporation, a firm that holds various biotechnology patents.
Dr. Waskal is the president and CEO of ImClone Systems Inc., a biopharmaceutical company. Dr. Waksal spent the first part of his career in academic medicine. He has published more than 50 review articles and chapters in the field of immunology and cancer. He sits on the boards of Tribeca Pharmaceutical Corp., Prototek, Microbes Inc., Valigen and Amerimed Corp.. He is also on the board of advisors of Rockefeller University.
Mr. Zegger is a partner of Pennie & Edmonds LLP, a law firm specializing in intellectual property and technology law. Mr. Zegger joined the New York office of Pennie & Edmonds LLP in 1987. His primary area of technical expertise is in chemical engineering, chemistry, pharmaceuticals and biotechnology.
Icahn ups the stakes
On April 20, Mr. Icahn raised the level of conflict further, offering to finance $1.8 billion for a merger between Visx and one of his own companies. He offered $32 a share for the company — at the time a premium of more than 50% over the April 19 closing price.
However, the offer came heavily qualified. He said the offer was subject to due diligence and financing. Visx decided to call Mr. Icahn’s apparent bluff by announcing April 26 that it had amended its Stockholder Rights Agreement and that the board would not stand in the way of any “all cash” tender offer at or above the $32 a share price.
Declaring that they believed Mr. Icahn’s merger offer was disingenuous, Ms. Dàvila announced in a press release that the board wanted to show stockholders their commitment to enhancing stockholder value. She said that, more likely, the Icahn offer to auction the company offered nothing new to Visx stockholders and would require the company to raise $300 million of new debt, while diluting earnings and restricting Visx’s ability to invest in the future.
In the end, and with little fanfare, Mr. Icahn withdrew his slate of nominees for the board. He did say that he would continue to follow up on his promise of a $1.8 billion merger. Visx responded that they were prepared to permit Mr. Icahn to commence due diligence in order to formulate a definitive all cash proposal at $32 a share or higher following his signing of a customary confidentiality agreement.
Since the May 4 election of the Visx board there has been no public word of any offers for Visx. From the time of Mr. Icahn’s proposal, Visx stock rose from $17 in mid-March to just under $24 at the end of April. Since then the stock value has steadily declined, with its sale price at $20 on May 9.
In July 1999, Visx stock reached its all-time high of $100 a share. It dropped steadily from then until February 2000, after which it has remained somewhat steady around the $20 a share mark.
For Your Information:
- Elizabeth Dàvila, president, CEO and chairman of the board of Visx, can be reached at 3400 Central Expressway, Santa Clara, CA 95051-0703; (800) 246-8479; Web site: www.visx.com.
- Carl Icahn can be reached via 767 Fifth Avenue, 47th Floor, New York, NY 10014; (212) 702-4309.