Carl C. Icahn Issues Open Letter to Shareholders of Illumina, Inc.
$ILMN
Dear Fellow Illumina Shareholders:
We’d like to call your attention to a few interesting points raised by Illumina’s letter published yesterday:
·Illumina’s letter is the first time we have noticed that the incumbent board has publicly acknowledged its underperformance. We would like to be the first to tell the incumbent board of directors: “Welcome to reality!” Why and how did they not recognize and attempt to address this underperformance earlier when it was so obvious to the outside world?
·Illumina’s letter is penned by incumbent Chairman John Thompson and begins with the phrase, “As Independent Chair of the Board of Illumina...” We wonder how Chairman John Thompson and CEO Francis deSouza can continue with straight faces to minimize their extensive relationship. We find this difficult to accept when CEO Francis deSouza publicly stated in November 2021: “I’ve known John over the last 15 years, as sometimes a boss, many many times a mentor and ALWAYS A FRIEND” (video).1 We also remind shareholders that, despite Illumina’s stock declining 62%, resulting in $50 billion of value destruction, the incumbent board of directors saw fit to reward CEO Francis deSouza with an 87% increase in compensation to $27 million in 2022 (as reflected in Illumina’s definitive proxy statement for 2022). While John Thompson may technically qualify under stock exchange rules as an independent Chairman of the Board, is he truly independent enough to hold CEO Francis deSouza accountable?
·Illumina also states that Goldman Sachs acted as the exclusive financial advisor to Illumina on the GRAIL acquisition and that Goldman provided a fairness opinion to Illumina’s board of directors. We question why Illumina has now decided to disclose that it obtained a fairness opinion when this fairness opinion was not disclosed by Illumina in the Form S-4 registration statement that it filed relating to the GRAIL acquisition. Specifically, we invite all stockholders to review the Consent Solicitation Statement of GRAIL, Inc. and Prospectus of Illumina, Inc. filed with the SEC relating to the GRAIL transaction (link).2
·We also question why Illumina selected Goldman to act as its exclusive financial advisor and to render a fairness opinion, given that Goldman was engaged by GRAIL to act as one of the lead underwriters in connection with GRAIL’s initial public offering. We believe that Illumina’s engagement of Goldman to render a fairness opinion, despite Goldman having acted as a lead underwriter on GRAIL’s aborted initial public offering, is additional evidence that Illumina’s board has not prioritized good corporate governance practices. To be certain, there were plenty of other investment banks to choose from.
1 76th Annual Dinner and Bay Area Business Hall of Fame – Induction of John Thompson (November 18, 2021):
2 Consent Solicitation Statement of GRAIL, Inc. and Prospectus of Illumina, Inc. (February 9, 2021): https://www.sec.gov/Archives/edgar/data/1110803/000119312521034540/d801214d424b3.htm
On May 25, 2023, a date fast approaching, Illumina’s shareholders will be able to decide for themselves which direction the company should take. We would like to remind all shareholders that Glass Lewis took the extremely rare step of recommending that shareholders vote AGAINST both an incumbent Chairman of the Board and a sitting CEO, while ISS recommended that shareholders vote AGAINST the incumbent Chairman of the Board.
The need for change is clear. We encourage all shareholders to vote FOR the three highly qualified Icahn Nominees – Andrew Teno, Vincent Intrieri and Jesse Lynn.
Sincerely yours,
Carl C. Icahn
Source:
https://www.sec.gov/Archives/edgar/data/921669/000153949723000967/exh-1.htm