(Bloomberg) — Clinigen Group Plc’s plan to sell itself to Triton Investment Management has won support with a prominent shareholder advisory firm despite concerns among large holders including activist investor Elliott Investment Management that the terms undervalue the pharmaceutical company.
Institutional Shareholder Services Inc. said the transaction warranted its “qualified support” because of its substantial premium with the certainty of cash considerations. Clinigen might have received a higher offer if it had run a more fulsome sales process, the advisory firm said. The lack of a breakup fee or restrictions on Clinigen negotiating with other parties, though, should alleviate some investor concerns, ISS said.
“There is no apparent and sufficient reason to oppose the transaction at this time,” ISS said in its report. “If a competing bid emerges, this will be re-evaluated and the vote recommendation may be reconsidered.”
Triton agreed to acquire U.K.-based Clinigen in December in a deal valued at roughly 1.5 billion pounds ($2 billion).
Some investors, including Elliott, which is Clinigen’s largest shareholder, consider the offer to undervalue Clinigen, according to people familiar with the matter, who asked not to be identified because it was private. None of Clinigen’s investors so far have gone public with their concerns.
Elliott said Tuesday in a regulatory filing that had increased its stake in Clinigen to 11.4%. Representatives for Clinigen and Elliott declined to comment on the ISS recommendation.
Clinigen shareholders are scheduled to vote Jan. 18 on whether to approve the Triton deal.
“Despite the presence of well-known activists with large positions, there has been no public opposition to the deal,” ISS said.
“While Clinigen’s assets may well be attractive to other PE firms or larger competitors, none appear to have demonstrated any public interest in acquiring the company,” it said. “In the absence of a higher offer, a vote for the proposed transaction is warranted at this time.”
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