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Hologic braces against a potential takeover

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Hologic takes the defense against a possible takeover

Massachusetts-based Hologic (NSDQ:HOLX) announced today that it adopted a stockholder rights plan, just as activist investor Carl Icahn nabbed up more than 12.6% of the company.

Icahn acquired about $285.4 million in HOLX shares, SEC documents show, and he’s already got some ideas for change at the women’s health devices maker. Hologic was quick to adopt a 1-year rights plan to defend the company against a hostile takeover.

HOLX shares jumped 2.3% today, trading at $22.80 as of about 12:15 p.m.

Icahn, who has a reputation for making waves at companies he takes big stakes in, said in a regulatory filing that he took an interest in Hologic because he felt its shares were undervalued, and he may seek a seat on Hologic’s board.

The medical device maker took little time in announcing its rights plan, which grants stockholders 1 right for each common stock share they own and gives investors the ability to buy into a new series of preferred stock should anyone try to nab a 10% or larger stake in the company, according to a press release.

The defensive tactics got a harsh reaction from International Strategy & Investment Group analyst Vijay Kumar, who told Bloomberg that Hologic’s board had "lost its street credibility" and that it would likely be booted in March.

The shakeup comes amid a tough year for Hologic, with sales expected to take a hit as the device maker faces reimbursement woes and pricing pressures.

The company earlier this month released a quarterly and full-year earnings report that beat analysts’ expectations, but a hefty $1.1 billion impairment charge devastated the device maker’s bottom line. The impairment charge was a result of recalculated goodwill for Hologic’s diagnostics business, the company said.

For the full year, Hologic posted losses of $1.17 billion, or $4.36 per share, on sales of $2.51 billion. That compared with losses of $73.6 million, or 28¢ per share, on sales of $2.01 billion in 2012. Adjusted for 1-time costs, Hologic reported earnings of $1.50, again beating Wall Street by 2¢.

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