Rumored Acquisition Target Bristol-Myers Squibb Names 3 New Directors, Plans $2 Billion Accelerated Share Buyback

Published: Feb 21, 2017

Rumored Acquisition Target Bristol-Myers Squibb Names 3 New Directors, Plans $2 Billion Accelerated Share Buyback February 21, 2017
By Alex Keown, Breaking News Staff

NEW YORK – While Bristol-Myers Squibb has become the subject of takeover rumors as share prices have declined about 15 percent since January, company leadership has not sat idle. This morning BMS temporarily increased the size of its board of directors by three and initiated a $2 billion stock buyback.

According to a BMS filing with the U.S. Securities and Exchange Commission, the company increased the size of its board to 14 members until the scheduled 2017 annual stockholders meeting, which is scheduled for May 2. The new board appointees include Robert Bertolini, Matthew Emmens and Theodore Samuels. Bertolini is the former president and chief financial officer of Bausch & Lomb, Emmens served as chief executive officer of Boston-based Vertex Pharmaceuticals and Shire Pharmaceuticals . Samuels currently serves on the board of Perrigo. Each of the new board members will receive annual compensation for serving on the board, as well as an annual retainer of $100,000 and an annual award of deferred share units valued at $170,000 on the date of grant, according to BMS’ form 8-K.

BMS CEO Giovanni Caforio said in a statement that the new directors add “important experience and skills” in managing the company’s businesses and operations. He said the directors will also “broaden our overall expertise in the pharmaceutical sector and more broadly in capital markets, and complement extremely well the existing skills on our Board. We look forward to working with them to advance our business strategy.”

When the annual stockholder meeting is held, Caforio said only 11 of the board members will stand for re-election. Lamberto Andreotti, the current chairman of the board, is stepping down from his role, but which other members will also step down was not specified by the company.

“Bristol-Myers Squibb continues to take decisive action to best position the company for growth driven by our leading portfolio of Immuno-Oncology medicines, including Opdivo and by an exciting diversified portfolio of medicines such as Eliquis and Orencia. We are committed to advancing the promising opportunities represented by our portfolio and pipeline in oncology as well as continuing our efforts to diversify through promising pipeline agents in heart failure, immunoscience and fibrosis,” Caforio said in a statement.

For the share buyback, the company said approximately 80 percent of the shares will be repurchased by Feb. 28. Caforio said the buyback program will demonstrate the company’s focus on enhancing shareholder returns “as we continue to capitalize on our long-term opportunities.” The buyback program is part of Bristol-Myers Squibb’s existing share repurchase authorization, the company said. Bristol-Myers Squibb anticipates that all repurchases under the ASR will be completed by the end of the second quarter of 2017.

As BMS undertakes efforts to strengthen its position, there are still rumors floating that the company could be an acquisition target by one of the larger pharma companies. Roche , Novartis and Gilead Sciences s have been rumored suitors. Pfizer was also a rumored to be a potential suitor, but some analysts have speculated the company is not likely to bite given the financial risks associated with immuno-oncology.

BMS has gone from the fourth most valuable pharmaceutical company in the United States to the ninth, according to a recent report by Bloomberg. Much of that has to do with a major setback the company had last year with its lead PD-1 inhibitor Opdivo.

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