Icahn's 13D pressure led Bausch Health to spin off Bausch + Lomb

Bausch Health, a diversified pharmaceutical company, carried about $20 billion of debt, and its eye-care unit Bausch + Lomb was buried in the larger group. In February 2021 Carl Icahn filed a Schedule 13D stating he intended to engage with management and the board on ways to enhance shareholder value, including the company's ongoing strategic review and possible board representation.

Icahn quickly negotiated a director appointment and nomination agreement, expanding the board from 11 to 13 directors and placing his portfolio managers Brett Icahn and Steven Miller on it. The presence of an activist's allies on the board changed how seriously the strategic review would be taken.

In May 2022 Bausch + Lomb was spun off via an initial public offering of 35 million shares at $18, raising $630 million, and began trading on the NYSE and TSX as BLCO. Bausch Health retained roughly 90% of the new company, and the IPO proceeds helped repay existing term loans and redeem notes.

Bausch + Lomb went public in May 2022, raising $630 million from 35 million shares at $18, with Bausch Health retaining about 90%.

Icahn's 13D made Bausch's strategic review a public, board-level issue.

Placing his own managers on the board gave Icahn direct influence.

Bausch's about $20 billion of debt made divesting a valuable division attractive.

An IPO of Bausch + Lomb let the market put a clean value on the eye-care business.

Even a minority 13D with a stated intent to engage can push a conglomerate to unlock a division the market had undervalued.

Bausch + Lomb traded independently from May 2022, with Bausch Health retaining a controlling stake. The Icahn-aligned directors (Brett Icahn, Steven Miller, Richard Mulligan) and chair John Paulson remained on the board. Later reports that Bausch + Lomb was exploring a sale underscored that the separation had created a distinct, valuable asset the conglomerate could monetize.