Top proxy adviser Institutional Shareholder Services on Friday recommended Bristol-Myers Squibb shareholders vote in favor of its bid to buy peer biotechnology company Celgene, according to CNBC’s David Faber.
The recommendation from ISS comes just weeks before Bristol-Myers investors will vote on whether to approve the company’s $74 billion bid for Summit, New Jersey-based Celgene.
Though recommendations from proxy advisors like ISS do not dictate how investors vote, large passive fund managers like Vanguard and BlackRock often weigh their advice when deciding how to vote their shares. Celgene shares rose more than 7 percent in early trading, while Bristol-Myers dipped 0.2 percent in choppy trading.
Not all stakeholders are happy about the big-ticket biotech deal.
Investment firm Wellington Management, one of Bristol-Myers largest investors, said last month that it is opposed to the tie-up.
In a rare public comment, Wellington said it “does not believe that the Celgene transaction is an attractive path towards” a business that “secures differentiated science and broadens the future revenue base.”
Shortly thereafter, activist investor Starboard Value added that it will leverage its smaller stake in Bristol-Myers to oppose the the deal.
“Bristol-Myers is deeply undervalued and the recent announcement of the Company’s proposed acquisition of Celgene Corporation is poorly conceived and ill-advised,” Starboard CEO Jeffrey Smith wrote in a letter. “There is a better path forward for Bristol-Myers, either as a more profitable standalone company with a more focused, lower-risk strategy, or in a potential sale of the whole Company.”
A spokesperson for Wellington Management declined to comment for this story. Starboard Value did not immediately respond to CNBC’s request for comment.