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Proxy adviser ISS backs one of Icahn's nominees for Illumina board

FILE PHOTO: Flags wave in front of Illumina's global headquarters in San Diego, California

(Reuters) -Proxy advisory firm Institutional Shareholder Services (ISS) on Friday backed only one of Carl Icahn's three nominees to Illumina Inc's board, saying that the activist investor's push to remove the company's CEO was too disruptive.

ISS backed Icahn's candidate Andrew Teno and said he could be an adequate replacement for Illumina Chairman John Thompson, but did not support any other Icahn nominee.

The partial backing by ISS comes just two days after another proxy adviser, Glass Lewis, backed Teno and another Icahn nominee, and said shareholders should vote against the re-election of current CEO Francis deSouza and Chairman Thompson.

Illumina, which specializes in gene sequencing, and Icahn have been locked in a months-long proxy battle, where Icahn has been looking to remove deSouza and Thompson from the company's board and criticized Illumina's deal to buy cancer test maker Grail.

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"In consideration of the lack of evidence of malfeasance by the CEO, and the fact that the dissident does not have a CEO candidate in hand ... removal of CEO deSouza from the board seems excessively disruptive at this stage," ISS said on Friday.

Withholding support from Thomson, however, "appears to be the most direct approach to achieve the change that is warranted," according to ISS.

Teno has served on the boards of FirstEnergy and Southwest Gas and ISS recommended that he replace Thompson.

The company will hold its annual shareholder meeting on May 25.

ISS recommended that shareholders also withhold support from dissident nominees Vincent Intrieri and Jesse Lynn.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shounak Dasgupta)