Activist investor Starboard Value became the latest investor to publicly criticise Bristol-Myers Squibb’s $90bn takeover of Celgene, putting in jeopardy one of the largest pharmaceutical deals in history.
Starboard said on Thursday it would vote against BMS’s acquisition of Celgene a day after the drugmaker’s largest shareholder came out against the blockbuster deal arguing it had overpaid to buy the biotech group.
Starboard chief executive Jeffrey Smith said the investment fund would solicit other shareholders in its fight to block the takeover and that more value could be had if BMS was itself put on the auction block.
“These results are not reflective of a management team and board of directors that has earned the right, in our view, to execute on a ‘bet the company’ acquisition,” Starboard wrote in a letter to the company’s stockholders.
“We believe the risks inherent in this acquisition paired with the long-term poor results at Bristol-Myers make it untenable to support such a transaction.”
Mr Smith added that the board should evaluate alternatives to bolster BMS’s prospects, including a sale of the company. Starboard earlier this year disclosed it had acquired 1m shares in BMS and planned to nominate new members to the pharmaceutical’s board.
The publication of the letter comes a day after Wellington Management, which controls about 8 per cent of BMS, said it would vote against the deal. Wellington characterised the purchase of Celgene as risky and warned that BMS was overpaying for the acquisition.
BMS has defended the proposed deal, saying the price was “attractive” and offered an “important and unique” opportunity.
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