LONDON BB Biotech, one of the biggest investors in Actelion, is backing the Swiss drugmaker's board and management in a battle with activist hedge fund Elliott Advisors, according to the Financial Times.
The biotech investment fund will on Monday tell other investors it will support Actelion's recommendations at a showdown shareholders' meeting on May 5, the paper said on its website.
The move will increase the stake held by shareholders backing the company to nearly 15 percent and make it more difficult for Elliott to replace much of the board after attacking Actelion for wasting money.
Elliott, which holds almost 6 percent of the shares, has demanded the resignation of Robert Cawthorn, Actelion's chairman, the removal of CEO Jean-Paul Clozel from the board and the appointment of six new directors.
BB Biotech, which owns almost 5 percent, has in the past been critical of some aspects of Actelion's record -- but it has nonetheless decided to back the board.
"BB Biotech will conduct itself as a critical shareholder demanding good corporate stewardship, but it shall also continue to maintain a constructive relationship with the management and the board of directors of Actelion. Therefore, we intend to support the proposals being put forward by Actelion," the FT quoted the upcoming statement from the fund as saying.
Rudolf Maag, another top Actelion investor, has also backed the board. Together, BB Biotech, Maag and Clozel hold nearly 15 percent of the company.
Officials at BB Biotech and Actelion were not immediately available to comment.
(Writing by Ben Hirschler; Editing by Dale Hudson)