FILE PHOTO: Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured on the blouse of an employee in Le Passage, near Agen, France March 29, 2018. REUTERS/Regis Duvignau/File Photo
(Reuters) – Bristol-Myers Squibb Co’s top shareholder Wellington Management said on Wednesday that it did not support the U.S. drugmaker’s $74 billion purchase of biotech Celgene Corp (CELG.O), saying the deal is too risky.
Wellington Management owns about 8 percent of Bristol-Myers shares and was the largest institutional holder as of Feb. 25.
Celgene shares fell 8.5 percent after the Wellington statement was released, while Bristol-Myers shares rose 3 percent.
Bristol-Myers said in January that it would buy New Jersey-based Celgene, combining two of the world’s largest cancer drug businesses in the biggest pharmaceutical deal ever.
Wellington said it had concluded that the deal asks Bristol-Myers shareholders to accept too much risk and that the terms offer the company’s shares to Celgene shareholders at a price well below the implied asset value.
The investment manager also said successful execution of the deal could be more difficult to achieve than depicted by company management.
Neither Bristol-Myers nor Celgene could immediately be reached for comment.
The Wellington statement comes a week after Bristol-Myers said that activist hedge fund Starboard Value LP intends to nominate five directors to the Bristol-Myers board.
Reuters reported in February that Starboard was working with a proxy solicitor to gauge the level of support among Bristol-Myers shareholders for the Celgene deal. If it finds enough discontent, Starboard could agitate against it.
Reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Bill Berkrot