Celgene jumps on 2-for-1 stock split
This article was originally published in Scrip
Celgene's stock price jumped 4.5% to $168.31 per share on 19 June after the company said its shareholders voted in favor of a two-for-one stock split.
Splitting each Celgene share – and the per-share value – in two will make the company's stock more attractive and attainable for a greater number of investors. Summit, New Jersey-based Celgene is trading near the top of its one-year closing price high of $171.94 on 2 January. The company's 52-week low was $113 on 24 June 2013. The stock's value generally has been on the rise over the past year, bringing its market cap to $67.4bn as of 19 June.
The number of outstanding Celgene shares will double for stock purchased as of the market close on 18 June from 399m to 798m shares. The number of total authorized shares will rise from 575m to 1.15bn. The authorized share total includes stock set aside for executive compensation and other purposes.
Current stockholders will get one additional share for each share they own on 25 June and Celgene's stock price will adjust to reflect the stock split on 26 June. The company previously split its stock in April 2000, October 2004 and February 2008.
In a proxy statement that Celgene filed with the US Securities and Exchange Commission (SEC) on 28 April in support of the two-for-one stock split, the company noted that splitting its stock could make it more difficult for investors or others to force an acquisition of Celgene.
The relatively benign disclosure could be an important one if potential acquirers take a page from the Valeant Pharmaceuticals playbook and enlist a wealthy investor to force a proxy vote. After three rejected bids to acquire Allergan, Valeant is now making a tender offer to the Irvine, California-based company's investors to acquire the Botox (onabotulinumtoxinA) and Restasis (cyclosporine) marketer (scripintelligence.com, 19 June 2014).