For Icahn, Drug Maker Deal Came After a Long Fight

The activist investor Carl C. Icahn has an ability to spin victory from defeat, as a $25 billion deal announced on Tuesday demonstrated.

Mr. Icahn is a major beneficiary of the deal by the Dublin-based drug company Actavis to buy Forest Laboratories, a rival in New York. Actavis is paying a 25 percent premium over Forest’s closing stock price on Friday. Mr. Icahn, through his firm, owned 11.3 percent of Forest’s shares as of Dec. 31.

The outcome is “terrific,” Mr. Icahn said in a statement on Tuesday that amounted to a victory lap. He thanked the board of Forest and its chief executive, Brenton L. Saunders, who took the helm last October with Mr. Icahn’s support.

The path to this victory, however, was an uncertain one that involved a prominent defeat for Mr. Icahn.

After taking a 6.5 percent stake in Forest, Mr. Icahn started a proxy contest in the summer of 2011, claiming that the company had lost billions of dollars worth of shareholder value over the previous decade. The investor nominated four director candidates for the board, criticizing Forest’s governance.

The challenge came at a vulnerable moment for Howard Solomon, the chief executive of Forest at the time, who faced the prospect of being excluded from participating in federal health care programs after the company settled charges of improperly marketing drugs. But the government withdrew that threat in August.

That same month, Forest shareholders defeated Mr. Icahn’s challenge, electing all 10 of the board nominees put forward by the company and supported by the proxy advisory firm Institutional Shareholder Services.

In spite of the defeat, Mr. Icahn, who at that point had increased his stake to a little more than 9 percent, kept fighting.

The following summer, Mr. Icahn, with a roughly 10 percent stake, tried a new tactic, trying to force Forest to disclose its succession plans and accusing the company of trying to “hide” something from shareholders. In response, the company said Mr. Icahn was drawing on his “tired playbook designed for maximum distortion, distraction and litigation.”

At the same time, Mr. Icahn was pursuing a fresh proxy fight, with a slate of four nominees for the board. The investor made more progress on his second try, succeeding in getting one of his nominees elected.

He was back at it in 2013. But this time, Mr. Icahn struck an agreement with the company that averted what would have been a third proxy contest. Under the deal, Forest named a new director supported by Mr. Icahn to its board.

Then, last September, Forest tapped Mr. Saunders, who formerly ran Bausch & Lomb, as its new chief executive, drawing plaudits from Mr. Icahn. “We were happy to have assisted in the selection process and we look forward to working cooperatively and constructively with the board and with Mr. Saunders to increase value for all shareholders,” Mr. Icahn said in a statement at the time.

But the ultimate victory did not arrive until Tuesday.

In one sense, Mr. Icahn’s investment in Forest recalled his recent involvements in Apple and Dell, situations in which the investor made money despite suffering setbacks. This month, Mr. Icahn gave up an effort to force Apple to buy back more shares, though he emerged from the fight with a profit on paper. He failed to stop a buyout of the computer maker Dell last year, but his opposition helped drive the buyout price higher.

“This is a huge win for ALL shareholders of Forest Labs and yet another validation of the activist investment philosophy in general,” Mr. Icahn said on Tuesday.

“As well as Forest shareholders have done here partially as a result of our efforts, the shame is that the fighting could have been avoided and shareholders could have realized even more value had the company’s advisers been more interested in bringing the parties together rather than burnishing their own brand as ‘defense’ wizards,” he said.

“But to quote Shakespeare,” he added, “‘All’s well that ends well.’”