Oft-downgraded diagnostics giant Hologic ($HOLX) is looking to fend off an unwanted takeover, adopting a poison pill plan after famed corporate raider Carl Icahn revealed a 12.6% stake in the company.
Hologic has taken up a fairly standard shareholder rights plan: From here on out, if any investor acquires 10% or more of the company, shareholders will be entitled to buy fractions of shares of new preferred stock, thereby diluting a would-be acquirer's stake in the company. The move is designed "to enable all Hologic stockholders to receive fair and equal treatment," the company said, preventing malintended investors from taking control through "coercive tactics."
Meanwhile, Icahn said in a regulatory filing that Hologic's shares are "undervalued," and he plans to talk to management about ways of boosting its stock price and perhaps "the possibility of shareholder board representation." Hologic quite clearly saw that as a threat to its independence, as Icahn has a long rap sheet of proxy fights, takeover attempts and corporate raids.
Investors, however, would seem to see a ray of hope in Icahn's interest. Hologic jumped as much as 4% to about $23 on Thursday, close to a year-to-date high for the up-and-down stock.
Hologic is still struggling to hammer out its identity after absorbing fellow diagnostics heavyweight Gen-Probe in a $3.8 billion buyout last year. Since then, the company has canned its CEO, sold off business units and worked to redefine its business model. But despite a few regulatory and sales victories, Hologic's outlooks, profits and share values have dipped, and new CEO Jack Cumming says 2014 will be another "transitional year" for the Massachusetts company.
Last quarter, Hologic boosted revenue by about 5.7% to $622.1 million, but a hideous $1.1 billion goodwill impairment charge likely related to Gen-Probe negated any gains.
- read Hologic's statement
- check out Icahn's filing