Biogen Idec Adds New Board Member: Another Line of Defense From Icahn?
Biogen Idec just added a member to its board of directors.
Boring, you say. So what?
Ok, given that the Cambridge, MA-based biotech company (NASDAQ: BIIB) just emerged triumphant last month from a blistering fight with billionaire investor Carl Icahn, who wanted to take over three of the company’s 12 board seats, we couldn’t help but wonder if there’s something more than meets the eye going on here.
So we asked. Does adding Brian Posner to the board and expanding it to 13 seats, while maintaining bylaws that put four seats up for election each year, provide an extra line of defense against a certain activist shareholder?
“That really wasn’t our motivation,” says Biogen spokeswoman Naomi Aoki. “One of our directors knew of his credentials, and thought he has good capabilities. It was about adding his experience on Wall Street and the investment community.”
It turns out Posner also has a direct connection to Icahn himself. Posner, a private investor and former hedge fund manager, was on the same side as Icahn in his recent fight to take over Yahoo (NASDAQ: YHOO). Posner’s name was on the list of 10 new directors Icahn nominated to the Yahoo board in May, along with Dallas Mavericks owner Mark Cuban. (Yahoo settled its dispute with Icahn earlier this week, by giving him three of 11 seats on its board. No word on whether Posner will get one of those Yahoo seats.)
So does this mean that Biogen’s board is throwing Icahn, still a powerful shareholder in the company, a bone by picking one of his allies for the board? Or, did they find someone familiar with Icahn’s thinking who can help defend the fort?
Aoki dismissed both of those rationales, saying Biogen drafted him solely for his credentials and capabilities. When asked if Icahn was involved, she said, “Mr. Icahn was not involved in the decision to nominate or elect Mr. Posner. This was done independently of Mr. Icahn.”
The rest of Posner’s background includes a stint as CEO of ClearBridge Advisors, a subsidiary of mutual fund giant Legg Mason. Before that, he co-founded and ran a hedge fund called Hygrove Partners from 2000 to 2005, and previously worked as a portfolio manager at Fidelity Investments.
The addition of Posner, 46, gives Biogen three directors with lots of Wall Street experience, counting Robert Pangia and the newly elected Stelios Papadopoulos. But Posner is the only one with hedge fund experience on his resume. He was recruited to the board by an existing member, and he was elected unanimously by the rest of the members, Aoki says. His term began July 23 and runs through the 2010 annual meeting, she says.
For taking on the directorship, Posner got 39,900 stock options that he can exercise at $71.38 a share, according to a regulatory filing. The stock has climbed 25 percent since the beginning of the year, so we’ll be watching the SEC filings to see if Icahn decides to take some profits and move on, or continue his quest to take over and sell the company for an even higher price. If Icahn continues the push, we’ll find out whether Posner is really his friend or foe.