Big Bristol-Myers Investor Opposes Deal -- WSJ
February 28 2019 - 3:02AM
Dow Jones News
By Patrick Thomas
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 28, 2019).
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 the size of Wellington's stake makes it Bristol's largest
shareholder, according to Refinitiv, the firm disclosed in a filing
Wednesday that it only holds voting power for about 28 million of
its 126 million shares, meaning its opposition could be less of a
factor than it appears. Still, it could prompt other shareholders
to more seriously consider opposing the deal.
"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 many
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 28, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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