Opinion between major shareholder advisors is deeply divided over whether Icos Corp’s best interests are being served if it accepts Eli Lilly’s bid to buy the firm for $2.3 billion.

The company issued a statement noting that two leading proxy advisory services, Glass Lewis and Co and Proxy Governance, are recommending Lilly’s revised offer of $34 per share in cash, but acknowledged that another such firm, Institutional Shareholder Services, is very much against the deal.

Glass Lewis, which opposed the original Lilly bid of $32 per share, now says that, “in light of the newly disclosed information (particularly that the release of management's financial projections),” the latest offer represents “a financially fair consideration to shareholders,” especially given “the execution risks that would remain with Icos shareholders if the transaction is not approved.”

Proxy Governance’s report echoed that sentiment, saying that “the company's board appears to have undergone a thorough process in negotiating the sale of the company with Lilly,” and “shareholders will, in the long run, be better off with the all-cash merger consideration."

ISS, however, is less than convinced and issued a report saying that the latest offer is still “insufficient to match the increase in value” of Icos because of the sales growth that the firm recently reported for Cialis (tadalafil), the erectile dysfunction drug that both the companies currently market and which Lilly is desperate to get full control of.

Icos chief executive Paul Clark said he was pleased that Glass Lewis and Proxy Governance are recommending the $34 per share offer, “which was carefully considered and unanimously approved” by the board of directors and added that the firm disagrees with the ISS conclusion. He stated his disappointment that the latter “refused to recognise the substantial and immediate value this offer will deliver to Icos shareholders.”

A special meeting of shareholders has been convened for January 25 to discuss the proposed merger but how the vote will go is still not clear. Last week, HealthCor Management, a New York-based hedge fund and the fifth-largest holder of Icos shares declared it will vote against the offer, saying the price "still does not represent adequate compensation." One thing that is clear is that Lilly is not prepared to pay more as chief executive Sidney Taurel said a month ago that $34 per share is the firm’s "best and last offer.”