By Michael Erman and Svea Herbst-Bayliss

(Reuters) – Bristol-Myers Squibb Co’s top shareholder Wellington Management said on Wednesday it does not support the U.S. drugmaker’s $74 billion deal to buy biotech Celgene Corp, imperiling what would be the largest pharmaceutical acquisition of all time.

The announcement strengthens the hand of activist hedge fund Starboard Value LP, which filed a slate of nominees to challenge Bristol-Myers’ board last week, and has been canvassing its shareholders seeking to oppose the deal.

Boston-based Wellington Management rarely makes its views public. Its displeasure with the deal could embolden other shareholders to come forward.

The development fueled uncertainty among investors over the cash-and-stock deal’s prospects. Celgene shares fell 8.5 percent in after-hours trading following Wellington’s statement, while Bristol-Myers shares rose 3 percent. The spread between Celgene’s share price and the value of Bristol’s bid nearly doubled to around 20 percent.

Wellington Management, which owns about 8 percent of Bristol-Myers shares, said it found the Celgene deal to be too risky and expensive. It said other options to create value for shareholders “could be more attractive.”

Dodge & Cox, Bristol-Myers’ fifth largest shareholder is also unhappy with the deal, sources have told Reuters.

Bristol-Myers said in a statement that its board and management have had “numerous conversations and meetings” with investors, including Wellington, since announcing the Celgene deal. “We believe that we are acquiring Celgene at an attractive price, and that this transaction presents an important and unique opportunity to create sustainable value,” Bristol-Myers said.

Celgene and Starboard declined to comment. Dodge & Cox sources did not immediately respond to requests for comment.

Unlike Wellington, many Bristol-Myers shareholders also have significant stakes in Celgene. This overlap could boost support for the deal, because Bristol-Myers shareholders will be less concerned about the company overpaying if the acquisition target, Celgene, is also owned by them.

“We continue to think the deal makes sense for Bristol-Myers, and ultimately will go through, despite this new risk, but have to acknowledge that Wellington has a much more commanding position than anyone else who has taken a stance against the deal so far,” Baird Research analysts said in a note.

Bristol-Myers would need to issue a significant number of new shares to pay for Celgene, and as a result Bristol-Myers investors are granted a vote on the deal. They will get to cast it at a special meeting scheduled for April 12. Were they to shoot down the deal, Bristol-Myers would have to pay Celgene a $2.2 billion breakup fee.

Bristol-Myers said in January that it would buy New Jersey-based Celgene, combining two of the world’s largest cancer therapy businesses. Both companies are facing significant challenges in the development and commercialization of their drug portfolios.

If the deal were to fall apart it would be a major setback for Bristol-Myers Chief Executive Giovanni Caforio at a time when the company’s most important cancer immunotherapy and growth driver, Opdivo, has fallen behind both in sales and development to Keytruda, a rival drug from Merck & Co.

Celgene has had its own clinical setbacks, losing more than half its market value between October 2017 and last month when the deal was announced. An expensive experimental Crohn’s disease drug touted as a future multibillion-dollar product failed, and Celgene’s expected approval of high-profile multiple sclerosis drug ozanimod was delayed.

In addition, revenue from Celgene’s flagship multiple myeloma drug, Revlimid, which brought in nearly $10 billion last year, is set to start dropping in 2022 when it loses its U.S. exclusivity.

(Reporting by Michael Erman and Svea Herbst-Bayliss in New York; Additional reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila, Bill Berkrot and Richard Chang)