Carl Icahn Ups Biogen Idec Stake—Now Owns 3 Percent; Also Buys Shares in Genzyme

11/14/07Follow @bbuderi

UPDATED NOV. 15: Billionaire investor and takeover artist Carl Icahn, who’s been trying to force a sale of Biogen Idec (NASDAQ: BIIB), has tripled his stake in the company, a document filed today with the SEC reveals. At the same time, he has also purchased a smaller stake in Genzyme (NASDAQ: GENZ), located almost around the corner from Biogen in Cambridge’s Kendall Square area. The filing—which covers investments made via Icahn Capital Management as of the end of the third quarter—shows he now owns 8.8 million shares in Biogen, or roughly 3 percent. He owns 1.5 million shares of Genzyme, less than 1 percent.

Icahn first made waves for Cambridge-based Biogen back in mid-August, when SEC filings for the second quarter showed that his group had bought 2.74 million Biogen shares. At the time that was a 0.95 percent stake, worth approximately $160 million.

Later that same month, the self-proclaimed activist investor was cleared by U.S. antitrust authorities to buy additional shares in the company, a move that helped drive up Biogen’s stock to a one-year high. However, until today’s filing there was no definitive word on how many, if any, additional shares Icahn had purchased.

But even with his exact stake unknown, Icahn made his presence felt. On October 12, in effect acknowledging pressure from Icahn, Biogen announced it would entertain offers to buy the company. That sent the stock soaring past $80 per share. Since then, speculation has run rampant about possible bidders—with the list of potential suitors covering several major Pharmas, although Pfizer seems to be the consensus choice as the most likely purchaser. With no bidders yet announced, the stock has since stumbled back to $ 70.01 as of today’s close. Icahn himself is rumored to have bid $23 billion, or roughly $78 per share (At today’s price, his current stake is worth about $616 million).

The Financial Times‘ dealRporter has reported that bids are due this week. But Biogen itself has not confirmed any deadline.

On the Genzyme front, it’s still too early to determine Icahn’s intentions for certain. But his pattern is clear: he buys into firms he feels are undervalued and then pushes for change—often including management overhaul and even a sale. We called over to the company first thing Thursday morning. Spokesman Bo Piela said this about Icahn: “We are aware that he has acquired Genzyme shares, and as a matter of policy we don’t comment on the activities of specific investors.” Piela also said, “Genzyme is focused on building value for all of the company’s shareholders. We’ve generated 20 percent compound annual growth and earnings over the past decade, and we expect comparable growth over the next five years.” He wouldn’t comment any further—but to me it seemed like he was saying that the company is doing fine without any push from Icahn.

In any event, Icahn’s presence seems like it’s already being felt in the stock market. Genzyme’s shares, which closed Wednesday at $70.76, were up $1.78 (a bit over 2.5 percent) to $72.54 in after-hours trading Wednesday night. In pre-market trading on Thursday, November 15. Biogen was up $0.49, to $70.50.

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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