Genzyme appoint investor to outmanoeuvre Icahn
pharmafile | April 16, 2010 | News story | Sales and Marketing | Contamination, Genzyme
Genzyme has appointed the head of one of its biggest shareholders to its board in order to block a hostile takeover bid.
Ralph Whitworth, co-founder of $6 billion private investment fund Relational Investors, will also chair a new committee to impose fiscal discipline on the firm.
The move is widely seen as Genzyme’s attempt to block corporate raider Carl Icahn, who in February made a bid to gain control of Genzyme following its commercial setbacks.
Fourth quarter profits last year fell 73% following a viral contamination which halted the manufacture of its biologic treatments Cerezyme and Fabrazyme in June, leading to shortages of the drugs.
Icahn, whose modus operandi includes gaining controls of companies in order to sell them, has been increasing his shareholding and wants seats on the board.
At the same time, the billionaire investor is reportedly pushing for a sale of Biogen Idec, another company in which he has a major stake.
In a pointed statement, Whitworth said: “I am looking forward to working with the board to further our agenda for creating shareholder value at Genzyme.”
“As long-term shareholders, we believe the company has great potential for further value creation, and I expect that bringing our perspective, as a large shareholder, into the boardroom will help unlock that value,” he concluded.
Whitworth, who has been on the boards of companies such as Mattel, Apria HealthCare Group and Wilshire Technologies, will also join Genzyme’s compensation committee and take a hand in okaying future board composition and succession planning.
“The board asked Ralph to join immediately because we value his perspective and insight,” said Genzyme chairman Henri Termeer.
He would bring to the board “strong corporate governance and financial expertise along with a passion for creating shareholder value and improving returns”, Termeer added.
Whitworth will also approve another independent director, “who will bring substantial expertise in biopharmaceutical manufacturing and operations”.
In addition, the board has created a new committee dealing with risk management.
Termeer insisted: “We have demonstrated our commitment to continuous improvement of our governance practices and we continue to examine how best to assure that we are doing everything necessary to build and deliver value for shareholders.”
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