GlaxoSmithKline (GSK) - Get Report shares rose Thursday after Bloomberg and the Financial Times reported that activist investment firm Elliott Management has acquired a large stake in the pharmaceutical heavyweight.
The size of the stake wasn't disclosed.
Elliott, which is headed by iconic investor Paul Singer, has plenty of experience in the healthcare sector, having taken stakes in the past in companies such as Alexion Pharmaceuticals, Alkermes (ALKS) - Get Report, Allergan (AGN) - Get Report and Bayer (BAYRY) - Get Report.
Glaxo, after lagging competitors for years, is set to jettison its consumer health unit next year. It also hopes to more than double the number of blockbuster drugs in its portfolio by 2026.
The stock recently traded at $38.08, up 5.4% and has firmed 2.5% over the past six months.
Elliott’s action “signals change to come in a company which, despite the hopes that arrived with its new management in 2017, has been an underperformer with a questionable acquisition strategy,” John Murphy, an analyst at Bloomberg Intelligence, wrote in a commentary.
Glaxo fired Moncef Slaoui, chairman of its bioelectronic medicine unit Galvani Bioelectronics last month, after an inquiry substantiated allegations of sexual harassment against him.
Morningstar analyst Damien Conover puts fair value for Glaxo at $48.
As for Elliott, two weeks ago, transportation and defense technology company Cubic agreed to be bought by private-equity firm Veritas Capital and Elliott at a raised buyout offer of $75 cash a share.
In February, The Wall Street Journal reported that Elliott is looking at getting into the action on SPACs. The Journal said Elliott has been chatting with investment bankers about raising $1 billion for a special purpose acquisition company.