April 25, 2012

Amylin: Icahn Attempt to Reopen Nomination Window Allowed to Proceed

John Grossbauer of Potter Anderson notes: Last Friday, Delaware Vice Chancellor Noble granted a motion to expedite a claim by Carl Icahn that the Board of Directors of Amylin Pharmaceuticals breached its fiduciary duties by not waiving an advance notice bylaw to permit stockholders to nominate candidates for election to the board following the Board’s rejection of an unsolicited offer by Bristol Myers. The Vice Chancellor found that Icahn had adequately alleged that the Board “radically changed its outlook for the Company” in a manner that potentially justified reopening the nomination process.

The decision is merely on a motion to expedite, which has a low standard whereby plaintiff need only articulate a “colorable claim” to succeed. Nevertheless, the opinion does suggest an interesting line of attack in instances where a board rejects a hostile bid (or makes some other major strategic decision) after the deadline for nominations has passed. The company’s announcement of a sales process could moot the case, as it appears Icahn may have gotten the result he wanted without running a slate.