Bausch Health shares surge on Icahn’s significant economic interest

Published 22/04/2025, 12:46
© Reuters.

Investing.com -- Shares of Bausch Health Co. Inc. (NYSE:BHC) surged 12% today after the company disclosed that activist investor Carl Icahn has amassed an economic interest that covers approximately 34% of its outstanding shares. The revelation came as Bausch Health filed a supplement to its proxy statement for its upcoming annual general meeting, updating shareholders on Icahn’s position through equity swaps and the bond holdings of John Paulson, the Chairman of the Board.

The company’s announcement clarified that Icahn’s additional economic exposure to Bausch Health came from equity swaps for about 90.72 million shares, accumulated over a series of trades. These swaps are cash-settled and do not confer voting rights or dispositive power over the shares, nor do they allow for physical settlement. The company’s Board, through independent counsel Sidley Austin, LLP, reviewed these positions and found that while Icahn refused to provide copies of the swap agreements, the information provided indicated a substantial long economic exposure.

In addition to Icahn’s position, the company also provided details on Mr. Paulson’s bond holdings. Paulson had purchased $50 million in Bausch Health bonds and has since expressed his intention to dispose of his debt securities to avoid any potential conflict of interest, aligning his actions with the interests of all shareholders.

Bausch Health also highlighted the adoption of a shareholder rights plan agreement (SRP) on April 14, 2025. The SRP is designed to prevent any single person or group from gaining a beneficial ownership of 20% or more of the company’s outstanding common shares without adhering to certain exemptions. The plan aims to protect shareholders from "creeping" take-over bids that could unfairly benefit certain shareholders at the expense of others, providing the Board with the ability to seek value-enhancing alternatives for all shareholders.

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