Praising his investment in
as an example of "shareholder activism," New York investor Carl C. Icahn on Monday confirmed that he had tendered his shares to Mylan as part of the company's $1 billion stock buyback.
However, Icahn left open the possibility that he could still mount a proxy fight against Mylan. "Mr. Icahn is still of the belief that shareholder value will be further enhanced if Mylan were put up for sale and consolidated with a larger company," said a press release issued by Icahn's office.
"At this time, the determination whether or not Icahn will conduct a proxy fight at Mylan will be dependent, for the most part, on the price at which Mylan's stock trades over the next several weeks, the actions of management and the views of large Mylan shareholders," the press release said. Icahn didn't say if he was withdrawing his $20-a-share bid for Mylan, a proposal that has been rejected by Mylan's directors several times. He has nominated a slate of directors to challenge Mylan's nominees at the company's annual meeting in late October.
Icahn has been Mylan's biggest shareholder, with about 9.8% of the stock, as well as the biggest critic of its management and strategy. "There is no question that shareholder activism has worked well to enhance shareholder value at Mylan," Icahn said Monday.
On Sunday, Mylan said that preliminary results of its stock buyback included Icahn's nearly 26.3 million shares. Mylan reported that an initial count indicates it had met its goal of repurchasing $1 billion in stock.
Mylan expects to pay $19.50 each for nearly 51.3 million shares tendered by investors, representing 19% of common shares. On Sunday, Mylan said it received a tender from a single shareholder of 26.3 million shares "at or below a price of $19.50 per share." Mylan surmised that the shareholder was Icahn.
Because the stock buyback was oversubscribed, Mylan will accept Icahn's shares and other investors' shares on a pro-rated basis of 94 shares for every 100 shares tendered. That means Mylan expects to purchase 24.7 million shares from Icahn.
Icahn said he decided to tender his shares, through his High River Limited Partnership, "late on July 15," following a Friday afternoon announcement by the Food and Drug Administration that the agency was investigating deaths related to a transdermal pain patch. Mylan makes a generic version of this patch, which was developed by
Johnson & Johnson
under the name Duragesic.
Icahn said that despite the FDA's announcement, there was "no clarification or further comment from Mylan" on July 15. (The company issued a brief statement Monday via a filing with the
Securities and Exchange Commission
that it "has been working with and continues to work with the FDA in connection with this matter.") On July 11, Mylan extended the tender offer deadline from 5 p.m. EDT to midnight on July 15.
Icahn said Monday he decided to tender his shares "based on careful consideration" of the FDA's announcement "and, among other things,
a belief that it would be difficult to win a proxy fight with the stock trading at the current levels. As previously stated, Mr. Icahn did not wish to be a passive investor in this company."
Icahn built up his stake in Mylan after the suburban Pittsburgh company made a bid for
( KG) 12 months ago. Icahn opposed the deal, which was cancelled in February, and has kept up his attack on the company's strategy and management.
Mylan announced plans for a stock buyback last month, setting a price range of $18 to $20.50 and choosing the best price that would enable it to achieve its buyback goal. Mylan also plans to repurchase another $250 million in stock on the open market after the auction is completed.
Analysts have put Icahn's cost basis with Mylan at $17.46 a share. Mylan's stock closed at $17.70 on June 13, the day before the buyback was announced. The stock closed at $19.40 on Friday.
On Monday, Mylan's stock dropped $1.02, of 5.3%, to close at $18.38 on trading that was more than four times the average daily trade.
Icahn's involvement with Mylan is a near duplicate of his campaign at oil company
, which recently completed a Dutch auction of its own at a price that was well above market. In both cases, Icahn effectively browbeat management into investor-friendly actions including the buybacks and discouraged potentially dilutive acquisitions.
Icahn threatened a proxy battle for board representation at both companies before each borrowed heavily to finance their buybacks. Mylan repeatedly said its decision to launch the Dutch auction was not prompted by Icahn. At Kerr-McGee, an Icahn lawsuit predated the auction.