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It's tough to take sides in the ImClone (IMCL) vs. Carl Icahn battle. Both sides have valid arguments about the misdeeds of the other party. The company and the investor have been waging a war of words in Securities and Exchange Commission documents and the press.

The latest salvo came from ImClone's board, which is attempting to convince shareholders to vote against Icahn's proposal to remove six directors without cause. In a document filed with the SEC on Wednesday, ImClone's management alleges that Icahn does not have shareholders' best interests at heart.

According to the document, Icahn was

uncooperative when the company received two offers to be acquired, the first at $35.50 a share in July and another one at $36 in September. Both offers came from the same "major international pharmaceutical company." ImClone claims that Icahn said he would actively oppose the acquisition. When asked why the board didn't accept the offer without Icahn's approval, considering that he only owns 14% of the company, an ImClone spokesperson declined to comment.

In September, the same large pharma company upped the offer to $36 a share, but with the condition that Carl Icahn support the bid. He refused, according to the document.

Carl Icahn did not return calls seeking comment.

Icahn currently controls four of the 12 seats on the board. The company claims it was duped regarding one of those seats. Dr. Alexander Denner was appointed to the board of directors in May, at the recommendation of Icahn. ImClone states that at the time, the company was advised that Denner, a portfolio manager with Viking Global Investors, was not affiliated with Icahn. A short time later, Denner went to work for Icahn Partners.

ImClone also accuses Icahn of attempting to wrest control of the company without paying a premium. According to the document, Icahn asked the board to waive Section 203 of the Delaware General Corporation Law, which would have allowed him to acquire more than 15% of the company's stock without first making a tender offer to all shareholders.

The board also claims that the directors Icahn is attempting to remove were the ones who refused to waive the clause.

The board asks shareholders to question Icahn's motives, stating, "rather than participating as part of a board that represents all stockholders, Mr. Icahn is asking you to trust him to do a better job on your behalf. We urge you to ask yourself whether you trust Carl Icahn to control the future of your company."

Counterpoint

For months, Icahn has been stating that ImClone's board has failed its shareholders. He holds management and the board responsible for not doing a better job selling Erbitux, its cancer-fighting drug and lone product.

He also claims that the company is incapable of recruiting a good CEO to run the company. ImClone counters that Icahn and two of his associates make up three of the six committee members charged with finding a new chief executive.

ImClone has been hit with additional woes unrelated to Carl Icahn lately. The company lost a patent lawsuit for Erbitux, which will likely cost the company some royalty payments in the future. Erbitux also faces new competition from

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Amgen's

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Vectibix, which was

approved by the Food and Drug Administration last week.

In an interview with

Bloomberg

last week, Icahn said he doesn't plan to renew efforts to sell the company. But if he isn't going to sell ImClone, does that mean the 70-year-old investor wants to run a biotech company?

What seems most likely is that the billionaire is looking to own more of the stock before he accepts a buyout. Eventually that could be good for shareholders. However, they must ask themselves if the risk is worth it.

If Icahn gains control but is unsuccessful in his attempt to sell the company, investors will be stuck with a domineering investor who may not be looking out for all shareholders. During this process, ImClone will waste resources on internal battles instead of focusing on research, execution and righting the ship. At this point it's difficult imagining another company stepping up and offering a significant premium for a company with these kinds of difficulties and management and board issues.

While both parties may be right, it seems like a lose-lose proposition for everyone involved.

In keeping with TSC's editorial policy, Lichtenfeld doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.

Marc Lichtenfeld was previously an analyst at Avalon Research Group and The Weiss Group and a trader at Carlin Equities. He holds NASD 86, 87, 7 and 63 licenses. His prior journalism experience includes being a reporter/anchor for On24 in San Francisco and a managing editor of InvestorsObserver, a personal finance Web site. He is a graduate of the State University of New York at Albany. He appreciates your feedback;

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