ImClone Rejects Bristol But Has A Mysterious Suitor
5 CommentsBy Ed Silverman // September 10th, 2008 // 9:44 am
The drugmaker calls the $60-a-share bid by Bristol-Myers Squibb ‘inadequate,’ and goes on to say in a statement this morning that famed corporate raider Carl Icahn, who chairs ImClone’s board, has had ’several conversations with the ceo of a large pharmaceutical company,’ which was not named.
The statement continues that ‘as a result of such conversations, the pharmaceutical company has submitted a proposal, subject to due diligence, but not subject to financing, to acquire ImClone for $70 per share in cash.
“The special committee has determined, subject to the execution of a confidentiality agreement, to allow this company to conduct due diligence for a two week period, subject to extension by mutual consent. No determination has been made as to whether $70 per share would be adequate.”
Bristol already owns 16.6 percent of ImClone and its $60 bid, which was wroth $4.5 billion when it was made two months ago, represented a 30 percent premium over ImClone’s closing stock price. Bristol wants full control of the Erbitux cancer medication. The two companies, you may recall, already have a deal to jointly develop and promote the drug, which generated $1.3 billion in sales last year.
In an investor note, Deutsche Bank analyst Barbara Ryan writes that “in our view, this will force Bristol’s hand to offer $7o sith no due diligence conditions immediately. Our best guess, is that Bristol winds up acquiring ImClone for $70, and that this is a good strategic and financial deal for Bristol at that price.”
Dan A.
My guess is Merck
CRH
I think it might be Sanofi and this is what broke Le Fur’s back with the company. It was widely known inside and outside the company that Dehecq wanted to buy Bristol and Le Fur didn’t. Now Dehecq can make another deal without Le Fur’s blessing by downgrading him and brining in someone else on board with this decision.
Don
I am hearing from a very good source that Novartis is in discussions
Annette Kreuger VP Pharma-Biotech Group Industrialinfo.com
My guess is there is no other serious offer, they just want to up the ante to where they think it should be. To say that bluffing is common in this industry is an understatement. A perfect example is when a company is “shopping” out a large capital project. Often a code name is employed and all parties are sworn to secrecy. In the majority of cases the company has already chosen its preferred site, but wants more in the way of incentives. So, other locations are brought in to the race and the “bidding” begins. Again, the company usually knows where they want to build the facility but its amazing how a little competition heats up the process. Take a look at what Merck received from North Carolina for building a new vaccine plant. A lot of econ dev people were heart broken when the state laid out $36 million. Of course the gamble paid off since the initial capital investment of $300 million has exploded to $700 million. That’s a win win.
Senthil, Sr.Consultant
While analyzing the situation, we need to look at the background of the investors… Icahn’s style is to invest in companies and then pressuring management into selling their companies at higher share prices. The letters from him and the reply are all part of the game. Sanofi may be a case (as its also owns Erbitux patent) intrested in Imclone, but more chances for “no other serious offer”.