Bristol-Myers Squibb has urged shareholders to back its $74 billion acquisition of Celgene Corp, despite opposition from major investors who deem the deal too risky and costly. The pharmaceutical giant emphasized the merger as the optimal strategy for long-term value creation amid growing shareholder tensions.
Two prominent investors, Starboard Value LP and Wellington Management, have publicly criticized the transaction. Starboard, known for its activist approach, called the deal "ill-advised" and advised shareholders to reject it at the April 12 meeting. The firm also nominated five candidates for the board, including its CEO Jeffrey Smith.
Wellington Management, which holds 8% of Bristol-Myers shares, expressed concerns about the deal's financial risks. While the firm declined further comment, its stance aligns with broader skepticism about the merger's valuation. Bristol-Myers countered that acquiring Celgene would provide "significant advantages" compared to alternative strategies like smaller-scale transactions.
The company highlighted that the deal would bolster its oncology portfolio amid competition from Merck & Co.'s Keytruda. Bristol-Myers also projected a more than 40% increase in earnings during the first full year post-merger, positioning the acquisition as critical to maintaining market leadership.
Reporting by Tamara Mathias in Bengaluru; Editing by Shinjini Ganguli and Sai Sachin Ravikumar
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