* This post was updated with a response from Forest Labs
Carl Icahn is no stranger to conflict and controversy.
But this time, his rhetoric isn’t only scathing, it’s also rather serious.
Forest Labs CEO Howard Solomon is the unlucky corporate figure to land in Icahn’s sites.
And what Icahn says in an open letter as well as during a live interview on CNBC’s Fast Money will – at the least - raise eyebrows if not a whole lot more.
Of course, Icahn is not an objective figure in these events; he has been a vocal critic of the management team at Forest Labs for quite some time. Last year he waged a proxy fight to wield greater influence over the company but he lost.
This year – it appears Icahn intends to escalate the rhetoric and take his attacks to a whole new level. In an open letter to CEO Howard Solomon, Icahn writes:
I have given a great deal of thought to the question of why you are afraid to give us board representation. I believe I have deduced the answer…. Several years ago you began a pattern of selling Forest stock at prices substantially higher than today’s price. Those sales now look to me like a savvy bet against the prospects of a company that was not prepared to meet the calamitous events that would befall it several years in the future when Lexapro went off patent. (Click here to see the full letter)
“We have a real problem with this company,” says Icahn on CNBC. “They knew Lexipro was going off patent and I don’t know that was fully disclosed."
But it’s a later passage in the open letter, that’s really fiery. He says:
However, unfortunate loyal shareholders that were not privy to your knowledge and that still hold stock today have suffered very significant losses. You, on the other hand, who have sold over $500 million worth of Forest stock, are in an excellent position. Be assured, we intend to thoroughly investigate by all available means whether the knowledge you had at the time you sold your stock was fully disclosed to other less fortunate shareholders and to determine how you were so prescient in selling your Forest stock at prices well above the current market.
Again, it's important to note that Icahn has an agenda. Icahn owns about 26.4 million shares, or 9.92 percent, of Forest, making him the second-largest investor in the U.S. drugmaker.