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Biotech / Medical : GLAXO (GLX) -- Ignore unavailable to you. Want to Upgrade?

To: Ibnbatutaa who wrote (167)	3/3/1998 7:24:00 AM
From: Zoltan!	Read Replies (1) \| Respond to of 222

The WSJ has a great article which implies that institutional investors are lining up behind Glaxo to either restart the merger or back a takeover of SBH. A prerequisite seems to be letting SBH's Leschly go. excerpt: As part of SmithKline's damage control effort last week, Mr. Woodford received a phone call from the head of SmithKline's investor-relations department. "But I found the explanation was fairly unbelievable. . . . He was whittering on about cultural differences and devolved management style," the fund manager groused. So at a meeting with Glaxo executives at the end of this week, Mr. Woodford said he plans to declare that Perpetual "would lend our support if some of the other larger shareholders in this country agitated for a change in direction." Such ferment appears to be widespread among fund managers. "Once they hold that carrot up to investors, they can't take it away and think nothing will happen," said Liz Thom of Edinburgh Fund managers, a Scottish investment fund with big holdings in both Glaxo and SmithKline. "The merger has such enormous potential benefits that one way or another, something else has got to happen and pressure will come to bear from different directions." One possibility would be an estimated GBP 50 billion hostile bid by Glaxo for SmithKline -- and some investors are so fed up that they're prepared to support such an assault as the next best thing to a merger. "We think a hostile deal is doable and desirable," said Steve Payne, an investment analyst at Scottish insurer Abbey Life Group PLC, another big shareholder in both Glaxo and SmithKline. "The biggest stumbling block here seems to be a personality clash between Glaxo Chairman Richard Sykes and Mr. Leschly, and we need to get their egos out of the way to get the deal done," Mr. Payne added. "Someone is going to have to step aside -- and right now the only way you can see that happening is for Glaxo to go hostile." interactive.wsj.com