By Robb M. Stewart

Activist investor Carl Icahn has tightened his hold on pharmaceutical company Bausch Health.

Bausch, which last week adopted a poison-pill plan to prevent any unsolicited takeover bid, said Tuesday it has learned Icahn and affiliates have amassed an economic interest covering about 34% of its outstanding shares.

News of the position buoyed the company's shares, which jumped 12% on the New York Stock Exchange in premarket trading.

In an update to its proxy statement ahead of a May 13 meeting of shareholders, Laval, Quebec-based Bausch said Icahn had entered into cash-settled equity-swap agreements covering 90.7 million of its shares, equal to a stake of just under 25%. That is in addition to the 9.4% interest previously disclosed.

Bausch's board last month ordered a review of Icahn's position in equity swaps and certain bonds held by John Paulson, Bausch's chairman, who is another big shareholder through Paulson Capital.

Sidley Austin, hired by Bausch as independent counsel, presented findings earlier this month to the company's board showing that Icahn said an additional long economic exposure to 90.72 million shares through equity swaps was accumulated over more than 100 trades executed between May 26, 2021 and Sept. 8, 2023. The agreements provide for early termination via cash settlement but don't confer voting power over the referenced shares, Bausch said.

The company said Paulson bought a total of $50 million in Bausch Health bonds before rejoining Bausch's board in June 2022, with pre-approval for the bond purchase from the general counsel of Bausch + Lomb, Bausch's eyecare business for which he was a board member.

Bausch said it determined that Paulson's bond purchase wasn't required to be disclosed, though Paulson requested that the company update its proxy statement to reflect his bond position and informed the company he plans to sell his debt securities when the trading window is open in order to eliminate any appearance of a conflict of interest.

Bausch has for years sought to spin off its Bausch + Lomb subsidiary, but efforts were checked by a standoff between shareholders including Icahn and Paulson and debtholders.

Late last month, the pharmaceutical company priced an offering of $4.4 billion in bonds as part of its efforts to repay in full and terminate its existing credit agreement. The company had earlier hired J.P. Morgan to help with financing after talks to sell majority-owned Bausch + Lomb failed to result in a deal.

Last week, Bausch's board approved a shareholder-rights plan aimed at thwarting any move to buy control of the company, including a so-called creeping-takeover bid. The plan would prevent a person or group from acquiring beneficial ownership of 20% or more of the company's outstanding shares without complying with certain permitted exemptions, which the company said would give it the opportunity to identify, solicit and negotiate alternatives.

As of Monday's close, Bausch's shares had fallen 44% so far this year in Toronto and 41% in New York.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 22, 2025 08:57 ET (12:57 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.