Icahn’s New Stake in Biogen Idec—Doing the Math

8/16/07

I feel bad even mentioning it, because it’s exactly the sort of mistake I’d make but, for any of you who read the New York Post‘s business briefs yesterday, a little clarification: Billionaire Carl Icahn did not just take a “more than 9 percent” stake in Biogen Idec.

The real scoop, revealed in SEC filings made a couple of days ago, is that during the second quarter Icahn’s firm, Icahn Management, bought 2.74 million Biogen shares. Biogen has about 288 million shares outstanding, so that’s more like a 0.95 percent stake (worth about $160 million today).

Even at that size, though, the stock purchase has some folks wondering if Icahn is plotting to make a move on Biogen, a la last year’s ImClone takeover. MarketWatch‘s Val Brickates Kennedy has a nice exploration of that question, though she comes to no strong conclusions either way. Kennedy quotes Cowen & Co. analyst Eric Schmidt, who quips that Icahn is “not always an activist investor. Sometimes he can be a passive investor.”

For its part, Biogen is keeping predictably mum. Here’s the official statement, courtesy of the firm’s director of public affairs, Naomi Aoki: “Biogen Idec is aware of the filing by Icahn Management LP. As a matter of policy, we do not comment on the activities of specific investors. The management of Biogen Idec is focused on building value for all of the company’s owners by continuing to execute its strategic plan during this powerful growth cycle.”

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