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ICN PHARMACEUTICALS, INC.
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(Name of Registrant as Specified in its Charter)
Iridian Asset Management LLC
and
Franklin Mutual Advisers, LLC
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The following is the text of a press release issued today by Iridian Asset
Management LLC and Franklin Mutual Advisers, LLC.
FROM: Iridian Asset Management LLC
Franklin Mutual Advisers, LLC
Open Letter to Shareholders of ICN Pharmaceuticals, Inc.
From Iridian Asset Management LLC and Franklin Mutual Advisers, LLC
Westport, CT, and Short Hills, NJ, May 22, 2002 -- Iridian Asset Management LLC
and Franklin Mutual Advisers, LLC today issued the following open letter to
shareholders of ICN Pharmaceuticals, Inc. (NYSE: ICN):
Dear Fellow ICN Shareholders:
As we approach next week's annual meeting at ICN, we want to take this
opportunity to remind all shareholders of the positions and course of
action that Iridian and FMA are advocating in our efforts to improve
shareholder value at ICN. Iridian and FMA are institutional investors
with significant stakes in ICN, who are exercising our rights as
shareholders to ensure that all of ICN's shareholders are represented
by a Board that is professional, independent and committed to working
solely in the best interests of shareholders.
Toward that end, we undertook an extensive selection process in order
to identify three extraordinarily well-qualified nominees to serve as
directors of ICN. We are confident that their experience as senior
executives and directors in the pharmaceutical and healthcare
industries, their expertise in corporate governance matters and their
willingness to aggressively advocate the shareholders' best interests
make them ideally suited to the needs of ICN today. It is these three
independent individuals whom we are asking shareholders to vote for,
and it is these three who, if elected, will work with their fellow
directors to bring about positive change at ICN.
As our proxy materials make clear, Iridian and FMA have advocated to
these nominees the following courses of action which we believe will be
in the best interests of all ICN shareholders.
First, we believe the continuing role and influence of Milan Panic at
the helm of ICN depresses its share price and deters well-qualified
executives from pursuing or continuing careers at ICN. As such, action
must be taken with all deliberate speed to relieve ICN of this burden.
Our conversations with other shareholders indicate there is broad
support
for this action. At the same time, the Board must proceed judiciously
with its search for new leadership and ensure that a new
highly-qualified CEO is promptly put in place at ICN. Fortunately, we
think that an attractive environment currently exists in which to find
well-qualified pharmaceutical executives.
Given the company's history of promises unkept, we trust that
shareholders will not be taken in by ICN's eleventh-hour attempt to
persuade shareholders that it is proceeding with a 'timely and orderly
change in leadership.' Had ICN's Board been serious when they announced
in October 2000 that Milan Panic would be transitioning to a
non-executive role at ICN Americas, beginning a succession search at
that time would have been an essential step.
We believe that, relieved of the leadership of Milan Panic, ICN will be
able to attract highly successful and highly qualified individuals to
manage its businesses. We also believe there are executives and
employees at ICN whose abilities will shine through once relieved of
Mr. Panic's overshadowing presence.
The second action we are advocating is for the Board to review the
composition of the board of directors and management at Ribapharm to
ensure that they are composed of highly qualified, experienced
individuals who collectively have the expertise to manage the business
and strategy of Ribapharm. We expect the ICN Board will work closely
with Dr. Johnson Lau, the CEO of Ribapharm, toward that end.
Importantly, we believe the newly constituted Board of ICN must ensure
that the individuals serving as directors and executives of Ribapharm
are in both perception and reality truly independent of ICN and Milan
Panic. Only when the new ICN Board is convinced that these
prerequisites have been fulfilled should Ribapharm be promptly spun out
to ICN shareholders on a tax-free basis.
Thirdly, the Board must review the stalled "restructuring" plan for ICN
International. We believe that ICN's currently disclosed plan to IPO an
approximate 40% stake of ICN International would be contrary to
shareholders' best interests, as it would eliminate the ability to
distribute this business to ICN shareholders without adverse tax
consequences. We would encourage the new Board to review the financial
and strategic plans for ICN International, in detail not available to
shareholders, and to make a determination as to the most appropriate
course of action. We would expect it to consider all possible
alternatives for ICN International, including a sale of all or part of
the business, a full spin-off to ICN shareholders on a tax-free basis,
a restructuring of the business to eliminate loss-making operations, or
some combination of the above.
Lastly, we believe the Board must work actively with management to
bring ICN's cost structures down to appropriate levels. We note that
ICN spent almost $50 million on corporate overhead for a business with
only $721 million of revenues in 2001. Simple comparisons of ICN's
financial ratios to similar companies lead us to the conclusion that
there are significant inefficiencies in the company's operations.
We are advocating the above actions because we believe they are clearly
in the best interests of all ICN shareholders. In our opinion, the
results of last year's annual meeting clearly indicated that ICN
shareholders support these actions.
Iridian and FMA have complete confidence in the ability of Rich Koppes,
Rob O'Leary and Randy Thurman to work with their fellow directors to
take these and other actions in the best interests of all ICN
shareholders.
The past Boards and management of ICN, under the leadership of Milan
Panic, have in our view failed to live up to their promises to ICN's
shareholders. The time for real change is now. We must put in place a
Board which shareholders can trust. By electing three independent
shareholder-nominated directors, shareholders will deliver three highly
qualified new Board members with an unmistakable mandate for real
change at ICN and abilities required to deliver on that mandate.
We thank the shareholders of ICN in advance for their support at this
year's annual meeting. Please vote the WHITE proxy card if you have not
already done so.
Iridian Asset Management LLC Franklin Mutual Advisers, LLC
David L. Cohen David Winters
Principal President
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Iridian is an SEC-registered investment adviser located in Westport,
CT. Iridian manages approximately $12 billion for institutional clients, pension
funds, charitable foundations and endowments, and invests primarily in mid-cap
and large-cap U.S. equities.
Franklin Mutual Advisers, LLC is a subsidiary of Franklin Resources,
Inc. [NYSE:BEN], a global investment organization operating as Franklin
Templeton Investments. Franklin Templeton provides global and domestic
investment management services through its Franklin, Templeton, Mutual Series
and Fiduciary Trust subsidiaries. The San Mateo, CA-based company has over 50
years of investment experience and more than $274 billion in assets under
management as of March 31, 2002. For more information, please call 1-800/DIAL
BEN(R) or visit franklintempleton.com.
In connection with their solicitation of proxies with respect to the 2002 annual
meeting of stockholders of ICN Pharmaceuticals, Inc. ("ICN"), Iridian Asset
Management LLC ("Iridian") and Franklin Mutual Advisers, LLC ("FMA") have filed
with the Securities and Exchange Commission (the "SEC") and disseminated to
stockholders a definitive proxy statement dated April 18, 2002. Stockholders are
advised to read the proxy statement as it contains important information.
Stockholders may obtain a free copy of the proxy statement and other relevant
documents filed with the SEC from the SEC website at www.sec.gov. Stockholders
may also obtain a free copy of Iridian and FMA's proxy statement by contacting
Mackenzie Partners in the manner described below.
# # #
Contact: For Press: For Shareholders and Institutions:
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Hedda Nadler Mackenzie Partners, Inc.
Mount & Nadler Larry Dennedy or Charlie Koons
Tel: (212) 759-4440 Tel: Call Collect: (212) 929-5500
Toll Free: (800) 322-2885