(Reuters) – Activist-investor Carl Icahn has filed a lawsuit against current and former board directors at Illumina regarding the acquisition of gene-sequencing company Grail, according to the Financial Times. The lawsuit comes after Icahn’s firm expressed concerns about the acquisition.
Illumina, a leading provider of genomics solutions, is known for its contributions to genetic research and the development of gene-sequencing technology. Last year, Illumina announced plans to acquire Grail, a startup focused on developing blood tests for early cancer detection.
According to Icahn, Illumina’s board directors failed in their fiduciary duty to shareholders by approving the acquisition of Grail at an allegedly inflated price. Icahn’s lawsuit seeks to hold the directors accountable for their actions and potentially block the acquisition.
Icahn’s firm has been a shareholder in Illumina since 2020 and is known for its activist approach, often pushing for changes in corporate governance and strategy.
Grail is a highly anticipated player in the biotech industry due to its innovative approach to cancer detection. The company raised significant funding from investors, including Jeff Bezos and Bill Gates, before being acquired by Illumina in a deal worth over $8 billion.
However, Icahn believes that the acquisition was mishandled and that Illumina overpaid for Grail. He argues that the company should have obtained a better deal, considering its existing stake in Grail. Icahn’s lawsuit could potentially disrupt the acquisition and force Illumina to reconsider its offer.
It is unclear how the lawsuit will progress and what impact it will have on Illumina and Grail. Legal experts suggest that Icahn’s chances of success may depend on his ability to prove that the board directors breached their fiduciary duty.
Regardless of the outcome, Icahn’s lawsuit highlights the growing activism of investors in the biotech industry. As the sector continues to attract significant investment, stakeholders are becoming more vigilant about protecting shareholder interests and holding management accountable for their decisions.
Both Illumina and Grail have yet to comment on the lawsuit.
Reporting by Mrinmay Dey in Bengaluru; Editing by Sherry Jacob-Phillips
