Big Bristol-Myers Shareholder Opposes Celgene Deal
February 27 2019 - 6:12PM
Dow Jones News
By Patrick Thomas
One of Bristol-Myers Squibb Co.'s largest shareholders is
opposing the company's $74 billion deal to buy rival Celgene Corp.,
becoming the latest investor to express its unhappiness with the
transaction.
Wellington Management Co., an investment firm that has a stake
of about 8% in Bristol-Myers, said Wednesday the deal asks
shareholders to take on too much risk and offers Bristol shares too
cheaply to Celgene shareholders. The firm also said executing a
successful transaction could be more difficult than management has
anticipated.
Boston-based Wellington Management is a private investment firm
that manages about $1 trillion in assets globally.
"While Wellington agrees that Bristol-Myers should be active in
business development that secures differentiated science and
broadens the future revenue base, Wellington does not believe that
the Celgene transaction is an attractive path towards accomplishing
this goal," the firm said in a statement.
Bristol-Myers and Celgene announced their proposed combination
on Jan. 3, touting the benefits of combining two major sellers of
cancer drugs.
In a statement Wednesday, Bristol-Myers said it has had numerous
conversations with shareholders, including Wellington, since it
announced the Celgene deal.
"We believe that we are acquiring Celgene at an attractive
price, and that this transaction presents an important and unique
opportunity to create sustainable value," the company said.
Bristol-Myers shareholders are set to vote on the takeover on
April 12, and approval requires a majority of votes cast. Owners of
Bristol-Myers stock as of March 1 will be permitted to vote,
meaning there is still a window for investors opposed to the deal
to buy shares to vote against it.
The companies have said they expect the deal to close in the
third quarter this year.
In addition to Wellington, activist investor Starboard Value LP
and Dodge & Cox, are unhappy with the deal, The Wall Street
Journal has reported. But that doesn't necessarily mean they will
vote against it.
Starboard earlier this month also nominated five potential
directors to Bristol-Myers's board. It isn't clear why Starboard
nominated the slate. Starboard has acquired about one million
shares in the company, Bristol-Myers previously said, a sliver of
its roughly 1.6 billion shares outstanding.
Dodge & Cox has a 2.6% stake in Bristol-Myers and is the
company's fifth-largest shareholder, according to FactSet.
Write to Patrick Thomas at Patrick.Thomas@wsj.com
(END) Dow Jones Newswires
February 27, 2019 18:57 ET (23:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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