Dissident Shareholder Resigns from ICN Board
ICN Pharmaceuticals Inc. said Wednesday that activist shareholder David Batchelder has resigned as a director of the Costa Mesa drug maker, which last week announced a new restructuring plan.
Batchelder’s firm, Relational Investors LLC, buys stakes in troubled companies and seeks to turn them around.
He joined ICN’s board last year after his firm bought 1.6 million shares in the company, a 2% stake.
ICN has agreed to split itself into three independent companies, a restructuring that would greatly reduce the role of ICN’s controversial chairman and chief executive, Milan Panic.
Shareholders had been pushing for the changes, with one investor threatening a proxy fight at ICN’s annual meeting in December.
“In light of the revised restructuring plan . . . I am confident that management is on the right track toward increasing shareholder value,” Batchelder said.
His resignation was part of the agreement ICN worked out with its biggest dissident shareholder on Oct. 19, he said. He would not say whether Relational Investors plans to buy or sell ICN shares.
ICN’s stock closed Wednesday at $37.81, up 69 cents a share, on the New York Stock Exchange. The company’s stock increased more than 49% this year.
Relational Investors can still appoint one independent director at an ICN annual meeting in May 2001 if the company “has not made sufficient progress in executing its restructuring,” ICN said.
Batchelder said he was confident the ICN board would execute the restructuring as promised.
“I don’t think there’s enough director and officer liability insurance to cover them if they backslide on this,” he said.
Under the restructuring, ICN will be split into Costa Mesa-based Ribapharm Inc., which has rights to the hepatitis C drug ribavirin; a Moscow-based company overseeing its international operations and a unit, probably based in New York, that will consist of ICN’s North and South American businesses.
Panic will head the overseas business and will cut all management ties to Ribapharm.
Bloomberg News was used in compiling this report.
