Wellcome warned of backlash of spacey
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Your support makes all the difference.Any move by Wellcome to derail Glaxo's hostile takeover bid through court action could prompt a backlash by the target's institutional investors, Wellcome Trust sources said.
The trust believes Wellcome may argue in the High Court against the charity's moves for consent to reduce its stake in the drugs company below 25 per cent. The trust has committed its 39.5 per cent stake in Wellcome to Glaxo in the latter's £9.5bn-plus bid.
"I think the institutions would be livid if Wellcome tried to thwart the bid like this. It is a restraint of trade to try to stop a shareholder selling a stake in this way," a source said: Institutional shareholders in Wellcome include Prudential, with 4.3 per cent, Schroders Investment Managers, 3.96 per cent, and Phillips & Drew Fund Management, 3.5 per cent.
The charity is concerned that Wellcome has refused to rule out an approach for permission to address the judge in the hearing, due probably late next week.
Glaxo sources believe the drugs giant has little to fear from the court hearing. "The court has already allowed the trust to reduce its stake once, to under 50 per cent," a source said.
Many City observers believe Wellcome has no intention of arguing for the trust to be stopped from reducing its holding, because it is acutely aware of the City repercussions.
Glaxo shares closed up 20p at 666p. Wellcome's price advanced by 13p to 1,018p.
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