Carl Icahn continues to praise the efforts of activist investors through his website, Shareholders’ Square Table. He released a statement on the announced acquisition of Forest Laboratories, Inc. (NYSE:FRX) by Actavis plc (NYSE:ACT).
Carl Icahn is “extremely pleased”
The activist investor said he was “extremely pleased” with this morning’s acquisition announcement, which places a value of $89.48 per share on Forest Laboratories, Inc. (NYSE:FRX). He calls it a “huge win for ALL shareholders” and “yet another validation of the activist investment philosophy.”
He notes that investors who had purchased shares of Forest Laboratories, Inc. (NYSE:FRX) on Nov. 16, 2009, which was when his involvement in the stock was first made public, and held those shares through today, would have seen a 209% return after paying $28.97 a share. Durin the same period, the S&P 500 Index saw a total return of 84%. Icahn notes that the annualized return for an investment into Forest Laboratories would have been more than 30%, compared to the 15% annualized return for the S&P 500 Index.
Carl Icahn: companies waste resources fighting back
He went on to say that their investment on Forest Laboratories, Inc. (NYSE:FRX) is a “textbook example” of the kind of value investors can see through the course of an activist campaign, particularly when a company’s board works with activists rather than “wasting corporate assets in unnecessary fights.”
When Icahn went activist on Forest Laboratories, Inc. (NYSE:FRX), he said the company either needed to grow or be acquired by another company in order to “realize its full potential. His firm conducted two proxy contests and settled in order to avoid a third one, ultimately electing two directors to the company’s board. Then they brought in Brent Saunders to be the company’s CEO and focused on increasing shareholder value.
The activist investor said he thinks proxy contests and “similar costly and time-consuming distractions” can often be avoided if it wasn’t for “the dubious and self-interested advice of activist defense counselors.” He suggested that they usually just answer “no” to activists and defend against them no matter what the costs are.