Forest Laboratories, Inc.(NYSE:FRX) Checks Carl Icahn Through `Poison Pill’

Forest Laboratories, Inc.(NYSE:FRX) is taking steps to prevent billionaire investor Carl Icahn from picking up a bigger stake in the company and attempt a hostile takeover or acquire control of the company.

On Monday the company said it has adopted a shareholders' rights plan - also called a poison pill - which will go into effect if the stake of any shareholder goes beyond 12 percent in the next 12 months.

Icahn is the second-largest holder in Forest and recently purchased 3 million more shares, through "rapid open market purchases" raising his stake in the company to 11.2 percent from 9.9 percent.

Poison pill measures are designed to prevent unwanted attempts to acquire or take control of a company.

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Earlier this year Icahn nominated four candidates to Forest's board of directors. On Aug. 15, shareholders elected one of those candidates while voting down the other three.

"The board has adopted a stockholder rights plan that is designed to ensure that all of Forest Laboratories' stockholders receive fair and equal treatment in the event of any proposed takeover of the company, to guard against abusive tactics to gain control of Forest Laboratories without paying all stockholders a premium for that control, and to enable all Forest Laboratories stockholders to realize the long-term value of their investment in the company," said Chairman, President and CEO Howard Solomon.

Shares in Forest were up 0.4 percent at $34.83 in early trades. They have risen more than six percent in the last six months.

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