Illumina (US:ILMN) is hitting back at activist investor Carl Icahn as the genome sequencing biotech firm disputed his inflamatory claims and rejected his proposed board nominations.

Icahn, who owns a 1.4% stake in Illumina, began his latest proxy battle on March 13, criticizing management for pursuing the 2021 Grail deal amidst regulatory scrutiny.

In a letter to Illumina shareholders, Icahn claimed that the directors of Illumina demanded an unprecedented level of additional personal liability protection on the day prior to closing the deal. Icahn’s letter described this as an extraordinary fourth layer of liability protection, in addition to the triple layer of protection already in place.

Icahn also accused the directors of Illumina of burying negative information from shareholders. This was highlighted in the most recent annual report filed by Illumina on Feb. 17 that included an admission by the board regarding the devastating tax consequences that would likely result when Illumina is forced by antitrust regulators to divest Grail.

This means that if Illumina is able to receive in a forced divestiture at the same value it paid for Grail, the company would have to pay taxes on the difference between the proceeds. Based on the market value of ILMN when the deal closed, that could be over $2 billion.

Icahn’s letter concluded by announcing the intention to nominate three associates for election to Illumina’s board of directors to bring much-needed accountability and transparency to the company.

Standard Indemnification

The company reverted back with a response in a press release later on Friday afternoon, firmly refuting Icahn’s claims and defending its acquisition and corporate governance practices.

Illumina’s response emphasized that D&O insurance and corporate indemnification are standard for Delaware companies, and that the company regularly reviews its insurance coverage to ensure appropriate protection for its directors.

The company highlighted that it is not uncommon for a company acquiring another business to increase insurance limits during the acquisition process. Illumina also defended its risk management and disclosure practices, stating that its disclosures are full, transparent, and timely, consistent with SEC and other disclosure requirements.

Regarding Icahn’s nominees for Illumina’s board, the company stated that they lack relevant skills and experience for the company’s board. The press release also noted that Icahn has no ability to accelerate the legal and regulatory processes related to the GRAIL acquisition, nor do his nominees.

ILMN Stock Moves

Illumina shares initially jumped 17% March 13 when the market traded on Icahn’s filing. Shares have slowly retreated since then but are still up more than 12%.

However, since June 2022, the ILMN stock price hastraded sideways after finding a new trading base more than 50% below its pandemic highs.

Research on the Fintel platform indicates ILMN has attracted above average levels of institutional buying activity in recent months. Fintel’s fund sentiment score of 70.66 is bullish on the company, ranking UEC in the top 25% out of 36,367 globally screened securities for the highest levels of institutional interest.

For some perspective, the platform has a bearish view on ILMN’s insider buying activity, based on a low score of 44.57. This score has been based on three net insiders selling shares in the stock in the last 30 days.

The insiders who have sold stock include: Chief Technology Officer Alex Aravanis, Chief Commercial Officer Susan Tousi and SVP/Chief People Officer Aimee Hoyt.

This article originally appeared on Fintel

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