"It is reasonable to think that investors who own substantial shares in both companies - or who only own shares in Celgene - are more likely to support the transaction, given their financial interests," Anderson wrote in a Feb. This overlap played a part in Wolfe analyst Tim Anderson's findings, as well. and we still expect the deal to go through," Newman said March 1.īecause Wellington did not also invest in Celgene like many of the other Bristol-Myers investors, Newman said they would be outvoted due to a more significant economic benefit to those who own both.
"Starboard Value has no meaningful voting power to oppose the Bristol-Myers/Celgene merger, with its tiny 0.06% position. "We agree there is significant risk with a deal of this size and Wellington could be concerned about clinical risk with key pipeline assets, as well as commercial risk, especially around Revlimid's longevity, or simply integration risk in trying to combine two large biopharma companies," Divan continued.Ĭanaccord Genuity analyst John Newman was more confident the deal would happen based on the minimal standing of the two objectors. "Some investors we have spoken to think Bristol could have acquired pipeline assets similar to what Celgene offered in a series of smaller deals that would not include the risks associated with Revlimid's longevity or the integration risk associated with a megamerger." "Given the Wellington development, the key question will be how this impacts broader investor sentiment on the deal ahead of the April 12th shareholder vote," Credit Suisse analyst Vamil Divan said in a Feb. Currently, the merger is expected to take place in the third quarter of 2019. It would bite into the revenue Bristol-Myers could expect going forward if the deal is completed. Wellington was shortly joined in the objection by Starboard Value LP, which held a much smaller share at 0.06%.īoth investors cited the patent cliff threatening Celgene's leading cancer drug Revlimid as the most volatile factor with competition looming on the horizon.
at the end of February, the deal has become more tenuous, analysts have said.Īt the time it sent its original letter of opposition, Wellington Management Group LLP was Bristol-Myers' largest investor, with 8.29% of outstanding common shares, according to Market Intelligence data. As two investors voiced opposition to Bristol-Myers Squibb Co.'s proposed $95 billion acquisition of Celgene Corp.
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