Carl Icahn's board nominees are being rejected by Illumina shareholders as the proxy battle heats up

The biotech company Illumina on Thursday urged shareholders to reject Carl Icahn's three board nominees at this year's annual meeting because they would cause a serious threat to the company's core business. 

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“Icahn's involvement with Illumina poses a threat to Illumina's long-term success, and his director nominees have no relevant skills to bring to the Board of Directors,” San Diego-based Illumina said in a preliminary proxy statement filed on Thursday in an attempt to gain momentum. 

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The shareholder of a DNA sequencing company was told to throw away any proxy card that was sent to them by the activist investor or his affiliate entities. Also, Illumina encouraged shareholders to support its proposed board of directors, noting that they would be mailing their definitive proxy materials to shareholders in the next few days. 

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In response, Illumina announced that it would provide more information about the strength of the Illumina Board of Directors and management team, "the strategy it has adopted to deliver shareholder value - with innovation at the core - as well as the potential damage that Mr. Icahn's associate nominees could cause to the company."

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In response to a request for comment, Icahn did not respond immediately.

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It is important to note that Illumina's remarks are one of its latest moves in its proxy war with Icahn, who owns a 1.4% stake in the company. Among the many demands that Icahn is making to Illumina, he wants them to unwind their acquisition of cancer test developer Grail for $7.1 billion, which he said earlier this year represented a “new low in corporate governance”.

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Icahn, in a statement on Thursday, pointed out that the company hasn't been an active shareholder for a long time and that he hasn't engaged with the company before seeking board representation. As part of its response to Icahn's proxy fight, the company explained it had "moved quickly and deliberately to meet with him, interview his nominees in good faith, and explore alternatives to a proxy fight."

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Illumina said that while Icahn was "not willing to compromise," he insisted that the board add his three nominees without consulting shareholders in advance. 

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“We have found that neither Mr. Icahn, nor any of his three associate nominees -- Jesse Lynn, Andrew Teno, or Vincent Intrieri - have a clear understanding of Illumina's business or GRAIL, nor the regulatory process that surrounds it,” the company explained. 

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One of the nominees for Icahn's board is Vincent Intrieri, who was previously employed by Icahn as the president and CEO of VDA Capital Management. Among the members of the group are also Jesse Lynn, General Counsel at Icahn Enterprises, and Andrew Teno, a portfolio manager at Icahn Capital LP, which is an entity where Icahn manages investment funds.

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In the aftermath of Illumina's announcement, shares of the company were relatively flat. There has been a decline in the company’s market capitalization from about $75 billion in August 2021, the month it closed its Grail deal, to around $35 billion today.