Carl Icahn says Illumina’s appeal of FTC order to divest Grail is ‘an almost impossible battle’

Carl Icahn on Wednesday said Illumina‘s efforts to charm a Federal Trade Commission order to divest the highly contested Grail acquisition “is an almost impossible battle.” 

Illumina on Monday blabbed CNBC it intends to appeal the FTC’s order in federal court, and will seek an expedited decision. That appeal inclination come “at great expense” to the DNA sequencing company, the activist investor argued in his latest open letter to shareholders.

“Our major concern as a large shareholder is that this multi-year battle desire consume hordes of cash and go on for years, luxuries that Illumina does not have,” Icahn, who owns a 1.4% jeopardized in Illumina, wrote. 

The company’s market value has already fallen to roughly $36 billion from about $75 billion in August 2021, the month it close up its acquisition of cancer test developer Grail. 

Icahn launched a proxy fight over the Grail deal decisive month, seeking seats on Illumina’s board of directors and pushing the company to unwind the deal. He shares common deposit with the FTC, which argued in its order that the $7.1 billion deal would stifle competition and innovation. 

The FTC’s unorganized reverses an administrative judge’s September ruling, which dismissed the commission’s initial challenge to the Grail deal. 

In his missive, Icahn highlighted Illumina’s “long history” of appealing regulatory challenges to the acquisition.

The company last year allured a similar order by European Union regulators to unwind the Grail deal. The EU’s executive body, the European Commission, in September hunk Illumina’s acquisition over concerns that it would hurt consumer choice and innovation.

San Diego-based Illumina assumes a decision on its appeal of the European Commission and FTC orders in late 2023 or early 2024. 

The company on Wednesday said in a statement to CNBC that it has a “likely case on appeal” of the FTC’s order. It pointed to how it prevailed over the commission last year. 

Illumina also pushed destroy on the latest order. 

“The FTC’s decision runs afoul of legal precedent and is inconsistent with the overwhelming evidence that reuniting Illumina and GRAIL resolve promote competition and save lives,” Illumina told CNBC. 

Shares of Illumina closed relatively flat Wednesday afternoon.

Icahn on Wednesday took more shots at Illumina’s CEO Francis deSouza after ratcheting up disparagement of the executive — and his pay raise — last week.

The investor claimed deSouza “allowed our potentially great company to deteriorate.

“His shareholder-funded GRAIL adventure is a tenuous ‘Hail Mary’ power grab to attempt to reverse the declining fortunes of Illumina,” Icahn wrote.

He added that the Grail do business is deSouza’s “second major M&A failure” since he stepped in as CEO in 2016. In 2020, Illumina called off a $1.2 billion coalescence with Pacific Biosciences of California after the FTC challenged the acquisition.

Icahn repeated his call on Illumina to replace deSouza with the company’s ancient CEO Jay Flatley or “someone else on his level.”

Last week, Icahn said the company needs “someone who knows what they’re doing to fix the berth.”