Most companies don’t mind when a billionaire starts buying up their stock. In fact, they usually treat it like a vote of confidence. Not Bausch Health. They're doing everything short of hanging a “No Billionaires Allowed” sign on the door.

So much so that Bausch just adopted a shareholder rights plan (better known as a poison pill) designed to prevent any one investor from gaining control of the company without board approval. The plan automatically kicks in if anyone tries to grab 20% or more of the company’s shares, making it financially punishing to go further.

This move comes just as Carl Icahn revealed he’s built up an economic interest in 34% of Bausch Health. If you suck at math, that’s more than a third of the company… but not in the traditional sense.

Icahn originally disclosed owning 9.4% of Bausch’s common shares. But in a newly filed update, Bausch said Icahn also has cash-settled equity swaps covering another 90.7 million shares, or roughly 24.6% more. Sure, these swaps don’t give him voting rights or ownership, but they do mean Icahn benefits from stock movements. It’s a way to quietly build influence without setting off immediate alarm bells… until now.

Once the board caught wind of it, they brought in legal counsel from Sidley Austin to dig deeper. They found that Icahn built his position over more than 100 trades between May 2021 and September 2023. When asked for copies of the swap contracts, Icahn declined. (Because of course he did.)

To make things more awkward, John Paulson, Bausch’s chairman, bought $50 million worth of Bausch bonds right before hopping back on the board in 2022. It was pre-approved (by Bausch + Lomb’s legal team), so technically fine… but now that everyone’s watching, Paulson says he’ll sell the debt “to avoid even the appearance of a conflict.”

Bausch has been stuck in a long, drawn-out attempt to spin off its eye-care subsidiary Bausch + Lomb, but the process has been complicated by lots of executives fighting, debt, and failed sale talks. Just last month, Bausch priced a $4.4 billion bond offering to help pay off its previous credit agreement.

They’re also sitting on $27 billion in total liabilities, which helps explain why they’re being extra cautious about control falling into the hands of one person… especially someone with Icahn’s reputation.

And if you know Icahn’s history in pharma, you know where this can go. Just last year, Icahn tangled with Illumina, blasting the leadership over a disastrous $7 billion acquisition and ultimately helping push the CEO out. His track record in pharma is long… and he usually gets his way.

Icahn hasn’t requested a board seat at Bausch. He hasn’t submitted a takeover proposal. And technically, he hasn’t violated the 20% poison pill threshold, since equity swaps don’t count as “beneficial ownership.” But with exposure to over a third of the company, he’s already positioned to apply serious pressure if he wants to.

Bausch says this move isn’t directed at anyone specific. (Sure.) But when you roll out a poison pill days after finding out Carl Icahn has economic exposure to 34% of your company, it’s not because you’re worried about some guy named Greg showing up with a Robinhood account.

Stock.News has positions in Robinhood.