Icahn to Push for Changes at Bausch Health After Disclosing Stake

Activist investor Carl Icahn disclosed in a regulatory filing that he has accumulated a 7.8% stake in Bausch Health, making him the largest single shareholder in the company. According to the filing, Icahn believes Bausch shares are “undervalued,” and that he plans to “engage in discussions” with management and board members to find ways of enhancing shareholder value, including potentially seeking board seats or making proposals for “other transactions.”

In response to the filing, Bausch stated that it welcomes “open communication with our shareholders and constructive input toward the shared goal of enhancing shareholder value.”

Meanwhile, Icahn’s move was welcomed by Larry Robbins, who heads the Glenview Capital Management hedge fund, which currently owns about 6% of Bausch shares. On Friday, Robbins sent a letter to Bausch CEO Joseph Papa urging the drugmaker to complete the spinoff of its Bausch + Lomb unit by the end of 2021. Bausch announced plans to split the eye-care business from its core pharmaceutical operations in August last year, but in his letter, Robbins said initial details for the spinoff “appear to be both vague and suboptimal,” and he called for the eye-care franchise to be overseen by a new board of directors.

Icahn and Robbins are not the first investors to agitate at Bausch. Hedge fund manager Bill Ackman of Pershing Square Capital Management held a stake in the drugmaker when it was known as Valeant Pharmaceuticals, but the bet eventually cost the activist investor more than $4 billion after a series of controversies at the company.

Last month, Bausch released preliminary fourth-quarter results, saying it projected sales for the 3-month period ended December 31 to be more than $2.2 billion, while for all of 2020, it expected to outperform the high end of its most recent revenue guidance range of $7.8 billion to $8 billion.