Activist Elliott Presses GSK on Progress at Investor Meeting
(Bloomberg) -- One of the world’s toughest hedge fund bosses has once again questioned the performance of GlaxoSmithKline Plc and its under-fire chief executive officer, Emma Walmsley.
Gordon Singer, head of Elliott Investment Management’s London office, asked Glaxo Chairman Jonathan Symonds to explain what was holding back Glaxo’s value creation and stock during a meeting with top shareholders Thursday, according to a person on the call, who didn’t want to be identified because the event was private.
Britain’s largest drugmaker called the meeting to provide an update on its plans to split next year, seeking to reassure shareholders of its progress amid pressure from activist investors, according to another person with knowledge of the gathering.
During the discussion, Symonds repeated the company’s commitment to successfully separating the consumer division from the pharmaceutical and vaccines business and defended Walmsley for doing what the board asked her to, according to one of the people at the meeting. Symonds reiterated the existing timelines for the changes and also focused on the board’s progress in appointing new members, another person said.
The company expects to appoint a new chair for the consumer business by year-end. Glaxo has also committed to beefing up the pharma and scientific expertise on the board of the pharmaceutical and vaccines business that will remain after the split.
The shares have risen 4.6% this year, trailing peers such as AstraZeneca PLc and Novo Nordisk A/S. Glaxo rose 0.3% in London trading Thursday, giving the company a market value of about 70 billion pounds ($95 billion).
Glaxo has been under pressure in recent months after it emerged in April that Elliott, which has a long track record of forcing sales or breakups, had taken a stake in the company. Last month, activist hedge fund Bluebell Capital Partners, which has a history of working with Elliott, also took a small stake. While both broadly agree with Glaxo’s plans to spin off its consumer arm, they’ve questioned the company’s decision to keep Walmsley at the helm of the remaining business.
In July, Elliott published a letter calling on Glaxo to run a search for a possible successor to Walmsley, something Bluebell has also asked for, citing her non-scientific background. They have also pressed for the U.K. drugmaker to be more open to a sale of the consumer unit.
Glaxo’s plans to separate the business were first announced nearly three years ago. In June, the company set out details for the first time to investors, with another forum planned for next year to provide more information on what the consumer business will look like.
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