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Chris Hughes

Elliott Gives Glaxo Boss a $46 Billion Challenge

The activist's demands look reasonable. But a push for the drugmaker to do a more radical breakup hasn't been ruled out.

Facing a list of demands

Facing a list of demands

Photographer: Luke MacGregor/Bloomberg

Elliott Management Corp. is making some easy demands of GlaxoSmithKline Plc. The activist came out with a 17-page analysis including a five-point action plan for the U.K. drugmaker on Thursday. If Glaxo isn’t already getting on with most of it, it should be.

The investment fund’s assessment of the company is that it could be worth 45% more than its current market value — a potentially 33 billion-pound ($46 billion) uplift. That view is more optimistic than even the very the top end of analysts’ targets for the share price. Elliott's explanation for the gulf between current market perception and what could be is Glaxo's weak credibility following strategy flip-flops and poor communication for many years. It won’t find much disagreement there.