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Carl Icahn sues Amylin to force board revamp

Attempt to block a company bylaw that requires shareholders to give advance notice of board candidates follows reported takeover bid from BMS

Billionaire investor Carl Icahn has followed up recent criticism of the board at diabetes specialist Amylin Pharmaceuticals with a lawsuit seeking to force the appointment of new company directors.

Icahn owns around 9 per cent of Amylin's shares and has been incensed by a lack of transparency regarding a $3.5bn takeover offer from Bristol-Myers Squibb that was reported to have been made in March.

Last week, Icahn issued a stinging rebuke to Amylin's management for issuing 10 per cent of the company's shares last month at a price of $15.62 apiece - well below the rumoured $22 per share offer from BMS - as well as stock options to executives with an exercise price of $16.02.

The investor has made no secret of his desire for Amylin to pursue a sale of the company, saying that Amylin is "at a crossroads".

The company could be sold at a premium now or continue to be run as at present with "substantial risk", he argues, adding that shareholders should be given an opportunity to choose.

The lawsuit, filed in Delaware Chancery Court, is trying to block a company bylaw that requires shareholders to give advance notice of board candidates, and also extend the deadline for nominations to be made ahead of Amylin's 2012 annual meeting.

A second lawsuit has also been threatened if Amylin does not provide copies of its financial reports and records by April 11.

In a statement, Amylin said: "We believe Mr Icahn's lawsuit is without merit. Amylin's board is fully aware of its fiduciary duties, and is committed to always acting in the best interests of all stockholders."

Amylin has been fixated on finding a new partner for diabetes drug Byetta (exenatide) and recently-approved, long-acting follow-up Bydureon since ending a decade-long collaboration with Eli Lilly last November. The company reported $517m in sales for Byetta last year.

10th April 2012

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