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Activist investor Elliott warns GSK investors that ‘change is coming’

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GSK chief executive Emma Walmsley
GSK chief executive Emma Walmsley

American hedge fund Elliott Management has told GlaxoSmithKline’s investors that “change is coming” as the activist prepares to demand a shake-up at the top of the drug maker.

Sources said that executives from the New York-based firm have told major GSK shareholders that their campaign against the British pharmaceuticals giant “will not be passive” in a sign of a major clash ahead. It is thought that Elliott could take aim at the drug maker’s chief executive Emma Walmsley over concerns about her leadership and lack of a scientific background.

Elliott’s multibillion-pound stake in the FTSE 100 drug maker only emerged last month, causing shares to jump amid speculation of a radical overhaul which could boost its flagging stock price.

One investor aware of Elliott’s plans said: “What’s the opposite of passive? Active. Change is coming and it’s going to be action orientated. People changing could be part of it. [Their ideas] are plausible in some cases but less so in others.”

Elliott is known for pressuring boards at some of the world’s biggest companies into change, pushing Whitbread chief Alison Brittain to sell Costa Coffee to Coca Cola for £3.9bn in 2018.

Investors said they are expecting a very aggressive defence from GSK, which is already planning to spin off its consumer business including brands such as Aquafresh toothpaste and Nicorette patches, so it can focus on prescription drugs and vaccines.

One shareholder expects GSK to ask for time to prove its strategy, summing it up as “don’t shoot now”.

A GSK spokesman said: We know our shareholders are keen for us to deliver our strategy and we are making good ­progress.”

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