Biotech, acquisitions, Analysis
Biogen Directors Win Backing From Third Advisory Firm, Icahn Could Be Heading For Defeat
Luke Timmerman 6/12/08
Biogen Idec (NASDAQ: BIIB) pulled off a trifecta today as the third major advisory firm for corporate elections, Proxy Governance, recommended shareholders vote in favor of the biotech’s own slate of directors instead of those nominated by activist investor Carl Icahn. Earlier in the week, RiskMetrics Group/ISS Governance Services and Glass, Lewis & Co. also said Icahn failed to make his case for ousting the Biogen directors.
The trio of recommendations “seem to make it more likely that Biogen’s slate will prevail,” said Eric Schmidt, a biotech analyst with Cowen & Co. in New York, in an e-mail. The reason is that big institutional investors, like Fidelity or T. Rowe Price, often have covenants that require them to justify a decision to overrule an advisory firm, which takes extra work and exposes the firm to risk, said one analyst who couldn’t speak for attribution.
Icahn had the fourth-largest stake among investors in Biogen, with 3.4 percent of the company through March 31, according to data compiled from regulatory filings by Yahoo Finance. FMR, Primecap Management, and Barclays Global Investors have larger stakes.
The shareholder vote is scheduled for June 19 in Cambridge, MA.
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