Elliott Calls for Board Changes at GlaxoSmithKline Ahead of Separation
July 01 2021 - 4:28AM
Dow Jones News
By Adria Calatayud
Activist investor Elliott Management Corp. has called on U.K.
pharmaceutical giant GlaxoSmithKline PLC to assess its board and
management ahead of a long-planned separation of its
consumer-healthcare business.
The investor criticized GlaxoSmithKline's "poor record of
execution and value creation" in a letter published Thursday, its
first public intervention over the FTSE 100 company since it built
a significant stake. It said the company's combined businesses
should be worth around 45% more than GlaxoSmithKline's current
valuation.
Elliott urged the company's board to appoint nonexecutive
directors with biopharma and consumer-health expertise prior to the
separation and to run robust processes for selecting the best
executive leadership for the two businesses, considering both
internal and external candidates.
GlaxoSmithKline Chief Executive Emma Walmsley, who became CEO in
2017, has driven more investment into research as well as the
separation of the consumer-healthcare business.
"Elliott is not advocating a specific outcome but is arguing for
a robust process, because it is critical that the board assure
current and future shareholders that the new leadership of both
companies was selected through a credible process that conforms to
corporate governance best practices," the investor said. It said
existing management should remain in place until a decision is made
on new leadership.
The investor also said GlaxoSmithKline should incentivize a
stronger performance and greater ambition, improve profitability
while investing more in research-and-development, display openness
to value-maximizing pathways and preserve the nimbleness of its
vaccines and pharma operations.
GlaxoSmithKline didn't immediately respond to a request for
comment.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
July 01, 2021 04:16 ET (08:16 GMT)
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