Elliott Management steps up pressure on beleaguered Glaxo boss
The corporate raider is stalking GlaxoSmithKline has raised serious questions about the future of chief executive Emma Walmsley in private meetings with the drug giant’s shareholders, The Mail on Sunday can reveal.
Secret hedge fund Elliott Management has reportedly phoned major GSK investors to discuss whether Walmsley was the right fit to run pharmaceutical company FTSE 100 for the long term.
A prominent shareholder told the Mail on Sunday that on a private call, Elliott “ asked if she was the best person for the job. ”
Elliott Management has raised serious questions about boss Emma Walmsley’s future
The hostile comments are the clearest signal to date of the powerful activist investor’s battle plan after taking a multibillion pound stake in GSK last month.
Elliott – who has a dreaded reputation for breaking up and selling businesses – still refuses to publicly state his intentions and declined to comment last night.
But multiple sources have confirmed details of her investor calls, which will now increase pressure on Walmsley ahead of a crucial meeting with GSK shareholders on June 23, where she will outline her growth plans for the 67.4-dollar pharmaceutical giant. billion pounds sterling.
Walmsley is expected to explain in detail how it proposes to separate itself from the consumer healthcare industry – with brands such as Panadol paracetamol and Sensodyne toothpaste – and leave GSK’s core business focused solely on pharmaceuticals and pharmaceuticals. vaccines.
But the revelation that Elliott could wave to dispel her casts doubt on how much time Walmsley has left at the top job and whether she could even be replaced before her plan to split the company is completed next year.
A source close to the GSK board said the company split “ raises the question of whether Emma is the right person to lead her, what investors and the board will consider. ”
Asked about her experience earlier this year, Walmsley, a former L’Oréal executive who previously ran the consumer arm, said: ‘I’m not a scientist, I’m a business leader. ”
A top 20 shareholder told the Mail on Sunday: ‘I’m thinking about what [Elliott] Emma’s feeling is that she’s not in the weeds in the pharmaceutical and vaccine business, and this is not her background. They have no problem with the way these businesses are run.
“ We’re still a long way from the split so we have to see how it all goes. ”
Another prominent shareholder said: “ My point of view is [Elliott] wants to change leadership, and that wouldn’t be surprising. His view and that of the market are that the consumer sector has underperformed – although it is improving now – and the pharmaceutical sector has underperformed. And Walmsley has been there for four years.
Walmsley to outline growth plans for GSK at a meeting with shareholders on June 23
GSK Shares have fallen 19% since Walmsley became chief executive in early 2017.
GSK, the world’s largest vaccine maker, has come under fire for not developing a Covid-19 vaccine. Rather, he worked with the French Sanofi on a vaccine that has not yet been launched.
Samuel Johar, chairman of executive search firm Buchanan Harvey, said: ‘It would be illogical for Emma to lead the pharmaceutical side of the company after the split. ”
He said Luke Miels, president of GSK’s global pharmaceutical business, would be a “credible internal candidate”.
Alistair Campbell, analyst at investment bank Liberum, said: “I am not convinced by the argument that GSK should be run by a scientist.
That said, after the group split, it will be a biopharmaceutical company and Luke will effectively be responsible for it, so there is an argument that he could become CEO.
“The decision to split the business and separate from Consumer Healthcare is the right thing to do.
“It’s a little frustrating. It’s going to take a while, but it might be an impatient sight.
GSK shares have fallen 19% since Walmsley became chief executive in early 2017
Sources said Dr Hal Barron, the Silicon Valley scientific director hired by Walmsley, could also be an internal candidate to replace her.
GSK is expected to hold a number of meetings between major shareholders and Chairman Sir Jonathan Symonds, who spoke publicly in favor of Walmsley at his annual general meeting last month. An investor scheduled to meet with Symonds said: ‘They’re doing a bit of a road show. ”
The Mail on Sunday revealed this month that major investors, including BlackRock, Dodge & Cox and Royal London, have reached out to Symonds to urge Glaxo not to be distracted by Elliott’s arrival.
Last week, it emerged that Elliott would not be pushing for the sale of GSK’s vaccine and pharmaceutical business.
It is understood that Business Secretary Kwasi Kwarteng supports Walmsley and his strategy, and has asked officials in the government’s Office of Life Sciences unit to monitor the situation.
One investor wondered if Walmsley could be distracted from his day-to-day work by his role outside the Microsoft board.
GSK and Elliott both declined to comment.
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