Celgene stock was on its way down Thursday following news that major investors are against a deal with Bristol-Meyers (NYSE:BMY).
Recent notes from major investors in Bristol-Meyers say that they will be standing against the acquisition deal with Celgene (NASDAQ:CELG). This deal would have Bristol-Meyers paying $50 and offering one BMY share for each share Celgene stock.
The most recent rejection of the deal between Celgene and Bristol-Meyers comes from Starboard Value. Starboard CEO Jeffrey Smith says that it will be using its stake in Bristol-Meyers to stand against its deal to acquire Celgene.
“Bristol-Myers is deeply undervalued and the recent announcement of the Company’s proposed acquisition of Celgene Corporation is poorly conceived and ill-advised,” Smith said in a statement obtained by CNBC.
It isn’t just Starboard that is against the deal to acquire Celgene. Investment firm Wellington, the largest shareholder of Bristol-Meyers, is also against the deal. Despite these disagreements, Bristol-Meyers still believes it will be acquiring Celgene stock for an attractive price.
Starboard Value and Wellington standing against the Celgene deal may result in other BMY investors choosing to do the same. The two already have a large influence on the vote with Starboard’s 1 million shares and Wellington’s 8% stake.
CELG stock was down 7% as of noon Thursday, but is up about 35% since the start of the year. BMY stock was up slightly at the same time, but is down close to 3% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.