Forest Laboratories, Inc.(NYSE:FRX) is taking steps to
prevent billionaire investor Carl Icahn from picking up a bigger stake in the
company and attempt a hostile takeover or acquire control of the company.
On Monday the company said it has adopted a
shareholders' rights plan - also called a poison pill - which will go into
effect if the stake of any shareholder goes beyond 12 percent in the next 12
months.
Icahn is the second-largest holder in Forest and
recently purchased 3 million more shares, through "rapid open market
purchases" raising his stake in the company to 11.2 percent from 9.9
percent.
Poison pill measures are designed to prevent unwanted
attempts to acquire or take control of a company.
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Earlier this year Icahn nominated four candidates to
Forest's board of directors. On Aug. 15, shareholders elected one of those
candidates while voting down the other three.
"The board has adopted a stockholder rights plan
that is designed to ensure that all of Forest Laboratories' stockholders
receive fair and equal treatment in the event of any proposed takeover of the
company, to guard against abusive tactics to gain control of Forest
Laboratories without paying all stockholders a premium for that control, and to
enable all Forest Laboratories stockholders to realize the long-term value of
their investment in the company," said Chairman, President and CEO Howard
Solomon.
Shares in Forest were up 0.4 percent at $34.83 in
early trades. They have risen more than six percent in the last six months.
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