UPDATE 2-Actelion board seeks rejection of Elliott plan

* Board says Elliott wants to force quick sale

* Urges shareholders to register for May 5 AGM

* Two board members rejected Elliott approach

* Data expected for macitentan late 2011/early 2012

* Shares slip, underperform peers

(Adds details, background, shares)

By Emma Thomasson

ZURICH, March 28 (Reuters) – The board of Actelion (ATLN.VX: Quote, Profile, Research)
urged shareholders on Monday to reject what it called an
ill-conceived plan by activist hedge fund Elliott Advisors to
install six new board members and prepare the way for a sale.

“Elliott’s attempt to seize control of your company has been
undertaken with one goal — to force a quick sale,” Actelion’s
board said in a letter to shareholders urging them to register
for the company’s annual general meeting on May 5.

Elliott, Actelion’s largest shareholder, announced this
month it had asked six pharma executives and M&A experts to
stand for election to the board of Europe’s biggest biotech
firm. [ID:nLDE72D1TZ]

The New York-based fund has pushed the Swiss group to
consider putting itself up for sale after a spate of product
setbacks and is calling for founder Jean-Paul Clozel to step
down from the board but remain as chief executive.
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Actelion shares were down 0.9 percent at 51.50 francs at
0708 GMT, underperforming a 0.1 percent firmer Stoxx 600 Europe
healthcare sector index (.SXDP: Quote, Profile, Research).

“The key message is that the company is clearly putting up a
fight and will stick to the current strategy,” said Kepler
analyst Tero Weckroth.

“However, we maintain our view that an outcome in favour of
the current board cannot be taken for granted.”

The board said they expected Actelion’s pipeline to deliver
substantial value for shareholders, adding they expected
important data on the firm’s next big drug hope — macitentan —
in late 2011 or early 2012.


“Elliott is seeking to force a transaction at a time when
Actelion’s robust product pipeline is fast approaching key
near-term milestones,” they said in their letter.

“Elliott’s objective, therefore, is an ill-timed attempt
that would surrender to a potential acquirer the future value
that rightly belongs to all shareholders.”

Macitentan is due to succeed Tracleer, a $1.8 billion-a-year
drug for a rare but deadly lung disorder that has helped to make
Actelion a major force but some investors are worried the firm
has not done enough to secure future revenue drivers, given the
failure of other experimental medicines.

The Actelion board said two of its members — Joe Scodari
and Carl Feldbaum — had rejected an approach by Elliott to
endorse its nominees.

“These directors … are not prepared to lend their names or
credibility to Elliott’s ill-conceived plan,” they said.

Pressure from Elliott, which owns nearly 6 percent of the $7
billion company, has been mounting ahead of the AGM — but the
company recently won support from another significant
shareholder, Rudolf Maag, who holds 4.2 percent. [ID:nLDE7261V8]

Actelion, which has hired Goldman Sachs and Credit Suisse to
advise it, is determined to stay independent, though some
analysts say it could be the next pharma takeover target after
Sanofi-Aventis’s (SASY.PA: Quote, Profile, Research) $20 billion-plus acquisition of
Genzyme (GENZ.O: Quote, Profile, Research).
(Editing by Mike Nesbit and Jon Loades-Carter)

UPDATE 2-Actelion board seeks rejection of Elliott plan