Wellcome war with Trust heats up

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Tensions heightened last night between the board of Wellcome and its biggest shareholder, the Wellcome Trust, whose agreement to pledge its 39.5 per cent stake to Glaxo's £9bn bid is expected to have sealed the drugs company's fate.

With only 24 hours left to run before tonight's midnight deadline for Wellcome to provide reasons for the Trust to retain its holding, it is understood that no approach had yet been made to Robert Fleming, adviser to the medical charity.

Wellcome is thought to be extremely irritated that the Trust in effect held a gun to its head on Monday when it said it would accept Glaxo's cash and shares offer unless the company came up with any information to make Fleming change its advice.

Analysts were sceptical that Wellcome would come up with anything to suggest the value of the bid was not extremely full, a 49 per cent premium to last week's price and close to the shares' all-time high.

Wellcome's shares reached £11.58 in February 1992 after a 15-month bull run in pharmaceutical shares that had seen them rise from 379p on hopes for Retrovir, the company's Aids treatment.

Wellcome's annoyance has been compounded by the great lengths its senior executives went to in 1992 to ensure the success of the sale of the Trust's second share offer.

It is felt that the Trust has gone back on the spirit of an agreement to maintain a long-term holding in Wellcome of at least 25 per cent.

Opinion was divided yesterday on whether Wellcome would play ball with the Trust and make an announcement today or hold fire until Glaxo issues its offer document, which is expected by the end of next week.

The onset of a phoney war becalmed the markets in both companies' shares yesterday. Only 4 million Glaxo shares were tradedand they closed 8p lower at 600p. About the same number of Wellcome shares changed hands, and they ended the session 1p lower at 954p, 50p below Glaxo's offer.