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Carl Icahn buys big stake in Bedford’s Hologic

Activist investor Carl Icahn has a reputation for becoming involved in firms he believes are undervalued.
Activist investor Carl Icahn has a reputation for becoming involved in firms he believes are undervalued.(Scott Eells/Bloomberg/File 2012)

Carl Icahn has acquired a 12.63 percent stake in the struggling Bedford medical device company Hologic Inc., signalling another battle between the activist investor and a Massachusetts company.

In a securities filing Thursday disclosing his position in Hologic, Icahn wrote that he thought the firm’s shares were “undervalued,” and that he intended “to have conversations” with company executives “to discuss ways to enhance shareholder value,” and possible gain seats on its board.

Such messages from Icahn usually amount to a kind of war talk that precedes a high-pressure campaign to force the targeted company into making drastic changes.

And sure enough, soon after Icahn’s filing, Hologic disclosed it was taking defensive measures to prevent him from gaining more influence over the company. It adopted what is known as a “poison pill,” a one-year shareholder rights plan that tries to block a hostile takeover by weakening an activist investor’s position.

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The “rights plan is intended to ensure that the board remains in the best position to perform its fiduciary duties and to enable all Hologic stockholders to receive fair and equal treatment,” Hologic said in a statement. Company officials did not respond to a request for comment.

A maker of diagnostics equipment that specializes in digital mammography technology, Hologic has stumbled after a series of acquisitions that swelled employment to more than 6,000, but failed to turn into profits.

It spent $3.75 billion to acquire a diagnostics company called Gen-Probe Inc. last year and $6.2 billion to purchase the breast and cervical cancer screening company Cytyc Corp. in 2007.

But in 2012 Hologic recorded a $73 million loss, and its stock has been volatile, hitting a low of $18.45 at one point.

The company recently replaced its chief executive officer and removed its top financial officer from the board of directors. On the news of Icahn’s stake, the stock closed Thursday up 2 percent at $22.70

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“It’s been a rough go of it for investors,” said Vijay Kumar, an analyst with ISI Group. “People were expecting some sort of activist to get involved to push the management for more shareholder-friendly action.”

Icahn has a reputation for getting involved with companies that he believes are undervalued and then battling with management.

He has recently bought into Apple Inc., Netflix Inc., and Dell Inc.

His interest in Hologic did not come as a surprise to many of the analysts who considered it a ripe target for activist investors.

Other activist shareholders such as Jana Partners LLC have recently bought into the company.

Icahn’s previous involvement in Weston drugmaker Biogen Idec Inc. led to its chief executive’s ouster, and he also pressured Genzyme Corp. of Cambridge to sell to French pharmaceutical giant Sanofi SA.

More recently, in April, he acquired two board seats and a 16.7 percent stake in Nuance Communications Inc., the Burlington speech recognition giant. But he has said little about his plans for the Nuance investment.

Kumar expects no such reticence from Icahn about Hologic, and he predicts the activists will find some of the company’s directors receptive.

“There’s been a lot of strategic missteps. At this point, management credibility is pretty low,” he said. “The company has done large deals that haven’t panned out.”


Michael B. Farrell can be reached at michael.farrell@globe.com.