Bristol-Myers Squibb Co is expected to win a shareholder vote to approve its roughly $74bn takeover of Celgene Corp, according to people familiar with the matter, the largest deal between drug makers in history.
The result is scheduled to be announced today in New York. Bristol-Myers has been tallying votes by shareholders after a campaign to win support for the takeover, which was opposed by a handful of top holders.
The expected outcome of the vote was described by people familiar with the process, who asked not to be identified because the matter is still private. A representative for Bristol-Myers declined to comment. Celgene holders will also vote today.
The massive merger will diversify Bristol-Myers’s pipeline of experimental drugs and reduce its reliance on two on-the-market medicines that dominate its sales, the blood thinner Eliquis and the cancer treatment Opdivo.
Celgene sells an ageing mega blockbuster, the cancer pill Revlimid, that will begin to face competition from cheaper copies in 2022 but still brings in about $10bn a year. It also has a pipeline of experimental therapies, including a number of partnerships with smaller biotechnology firms, to develop new oncology therapies.
For each share of Celgene that holders own, they’ll get $50 in cash and one share of Bristol-Myers stock. The deal was worth about $74bn when announced, though the value of the takeover has fluctuated with Bristol-Myers shares.
Celgene shares closed Thursday at $94.23, less than $2 shy of the $96.09 value of the offer based on Bristol-Myers stock price. The spread between Summit, New Jersey-based Celgene shares and the offer value has been narrowing as investors grew more confident it will be approved.
Celgene stock rose 0.8% to $95 in early trading in New York yesterday. Bristol-Myers was up 0.4% to $46.28.
After the deal was announced in January, some top Bristol-Myers shareholders opposed it, saying that the New York-based company would do better on its own, or should sell itself.
Wellington Management Co, Bristol-Myers’s No 2 holder, said in February that it didn’t think the merger was the right path for the company. And activist investment firm Starboard Value said it would start a proxy fight to block the takeover bid and install several board members.
Starboard called off its efforts in late March after two prominent shareholder-advisory firms, Institutional Shareholder Services Inc and Glass Lewis & Co, urged investors to support the transaction.
Not everyone is sold on the merits.
“We remain concerned over product concentration,” Ashtyn Evans, an analyst at Edward Jones & Co who has a hold rating on Bristol-Myers shares, said in an interview earlier this week.
“I would have liked to see Bristol buy more pipeline assets rather than establish products like Revlimid. While this will give them additional expertise in cancer, the concentration adds an element of risk.”
