Drugmaker Bristol-Myers gains after Starboard Value takes stake

Bloomberg

Shares of drugmaker Bristol-Myers Squibb Co. gained, with acquisition target Celgene Corp. falling after activist hedge fund Starboard Value was said to have taken a stake in Bristol-Myers.
The size of Starboard’s stake and any plans that Jeff Smith’s hedge fund might have for its investment in the $81 billion drugmaker couldn’t immediately be learned when Bloomberg reported the position, citing people familiar with the matter. Bristol-Myers shares declined last month after the New York-based drugmaker made a record $74 billion deal to
buy Celgene.
Bristol-Myers shares rose 1 percent to $50.37 at 1:44 pm in New York. Celgene fell 2.3 percent to $87.63. The moves could signal that some investors are betting the deal is less likely to close, or that the terms could change.
“Since Bristol announced its plans to acquire Celgene, we have had many investors ask us if the deal might potentially get disrupted,”‘ said Vamil Divan, an analyst with Credit Suisse Group AG. “The possibility of an activist coming in and pushing Bristol to look at other options, including maybe looking for a potential buyer, has also been raised and is interesting.”
Starboard didn’t respond to requests for comment over the weekend about its stake. A representative for New York-based Bristol-Myers said the company declined to comment. Purchasing Celgene will give Bristol-Myers control of one of the most successful cancer drugs of recent years, the top-selling blood-cancer therapy Revlimid, which costs more than $100,000 a year. But that drug is the subject of patent litigation which has the potential to open it up to generic competition.