For the second time in two years, Carl Icahn is going directly after Forest Laboratories Inc. CEO Howard Solomon.
The 84-year-old Solomon, who has led Forest for 35 years, was a big target of Icahn's in his unsuccessful 2011 proxy war against the pharma company. Now, in a 13-D filed with the Securities and Exchange Commission, Icahn has decried the lack of an apparent succession plan for Forest.
"[Stockholders] have a right to know how Forest intends to fill this role going forward," Icahn wrote. "Perhaps there are plans that are not being disclosed regarding Howard Solomon's son, David Solomon, a man whose only senior level executive experience has come from working for his father ... what is [Forest] trying to hide?"
He added: "[Forest] is not a dynasty to be despotically handed down from father to son ignoring the great risk of this action to its shareholders."
Forest responded angrily Friday, claiming that it is planning for a successor and has retained a recruitment firm to help it do so.
"We regret that Mr. Icahn has resorted once again to his tired playbook designed for maximum distortion, distraction and litigation rather than engaging constructively with the company," Forest said, arguing that Icahn is just "recycling" the same arguments that were rejected by shareholders last year. "While we remain prepared to engage in a reasonable dialogue with Mr. Icahn, we think most people see through his attempt to reinvent himself as a 'governance guru.'"
In his 2011 proxy battle, Icahn tried to turn investors against Solomon by using an ongoing investigation by the Department of Health and Human Services related to charges of alleged obstruction of justice and illegal promotion of antidepressant Celexa. Although Forest was forced to pay $313 million in a settlement with the U.S. Department of Justice and the HHS threatened to blacklist Solomon, the agency eventually cleared the CEO of the charges.
Solomon took over the role of president and promoted his son David as a senior executive reporting directly to his father during the government investigation. The company indicated at an April 2011 board meeting that the promotions were enacted "with a view to developing the succession plan," but "these positions have yet to be filled," Icahn wrote.
"The board's cloak and dagger approach regarding its succession plan has gone on long enough," the letter said.
Icahn hopes to put four new faces on Forest's 10-member board of directors at the company's annual shareholder meeting on Aug. 15: Eric J. Ende, Andrew J. Fromkin, Pierre Legault and Daniel A. Ninivaggi. In a scathing letter to management nine days ago, he demanded access to Forest's books and records and railed against numerous "unfavorable change of control provisions" the company has embedded into its license agreements with various companies that have made it less attractive as a takeover target. Icahn reportedly filed a complaint with the Delaware Chancery Court on Friday seeking access to the documents.
Shareholders unanimously rejected his attempt last year to oust Forest's entire board of directors. Forest took a swipe at Ende Friday, noting that he received the lowest number of votes of any of the 14 board nominees in 2011.
Forest's stock traded at $34.97 per share midday Friday, up from a $34.12 per share close on Thursday. Though it peaked in February 2004 and is worth less than half the $76 per share it was then, it has climbed roughly 15% in 2012.