Bristol-Myers shareholders approve $74 billion Celgene deal

Regis Duvignau | REUTERS

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.

Bristol-Myers Squibb shareholders approved the pharmaceutical giant’s $74 billion acquisition of cancer drugmaker Celgene in a vote on Friday.

The deal, announced in January, was hard sell to Bristol shareholders from the start and the approval concludes a tumultuous period for Bristol, which saw push back from institutional investors. The acquisition adds about $32 billion in fresh debt to Bristol’s balance sheet while assuming $20 billion in Celgene’s debt, the companies said at the time.

More than 70% of eligible shareholders voted for the deal, the company said Friday. Roughly 24% of shareholders voted against the deal and 1% abstained. Both Bristol and Celgene shares were slightly higher in morning trading.

“We are pleased with the outcome of today’s Special Meeting and thank our shareholders for their support for this combination,” Bristol’s Chairman and CEO Giovanni Caforio said in a statement.

Buying Celgene was seen by Wall Street analyst as giving Bristol more cancer drugs at a time when its immuno-oncology portfolio struggles to keep up with rival Merck’s. Bristol’s blockbuster Opdivo, which boosts the immune system to attack cancer, has fallen behind its leading competitor, Merck’s Keytruda.

Hedge funds Wellington Management and Starboard Value in late February said the deal didn’t sit well with them. Wellington — which is Bristol’s largest institutional holder — said the deal asked Bristol shareholders to accept too much risk. Starboard cited similar concerns, saying the Celgene deal was “poorly conceived and ill-advised.”

Starboard eventually ended its fight against the buyout once Institutional Shareholder Services and Glass Lewis recommended Bristol-Myers shareholders vote in favor of its bid.

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Bristol said Friday the deal, which is expected to close in the third quarter of this year, will create a “premier innovative biopharma company with leading scientific capabilities.”

“We look forward to bringing the companies together, which we believe will deliver significant shareholder value,” Caforio said.