FT vote:Mystery suitor approaches ImClone
By Julie MacIntosh in New York
September 10 2008 18:59
ImClone on Wednesday formally rejected a $60-per-share offer from Bristol-Myers Squibb to buy the 83 per cent of the company it does not already own, and countered Bristol-Myers’ offer by disclosing that it has received a $70-per-share bid from another suitor.
ImClone, the cancer-focused biotechnology company chaired by Carl Icahn, solidified a stance it had taken in early August and ruled that Bristol-Myers’ offer was too low.
The bid, which was made public in late July at a 29 per cent premium to ImClone’s share price at that time, values ImClone at $5.2bn, and values the stake Bristol-Myers is angling to purchase at $4.5bn.
Mr Icahn revealed on Wednesday, however, that ImClone has received a higher proposal from a “large pharmaceutical company” – an early-stage offer that resulted from a series of conversations with the unnamed bidder’s chief executive.
The proposal, which would value ImClone at $6.1bn, is subject to the bidder’s ability to review ImClone’s confidential financial materials. ImClone said it would let the rival bidder pore over its data for at least two weeks.
ImClone said the second suitor’s interest was not contingent upon its ability to win financing for a deal. ImClone had not determined, however, whether it felt that a $70-per-share bid from the second party was adequate.
Many companies are looking to grow in the types of oncology treatment for which ImClone is known, and industry sources pointed to Germany’s Merck, Pfizer, Eli Lilly, Novartis and GlaxoSmithKline as potential suitors. Merck already sells Erbitux outside the US and knows ImClone’s business well.
Shares of ImClone traded 7 per cent higher, just above $68 per share, by Wednesday midday, as investors weighed whether the presence of another bidder would force Bristol-Myers to raise its offer.
Bristol-Myers and ImClone have been partners in making Erbitux since 2001, and Bristol-Myers is ImClone’s largest shareholder. Some industry sources see Bristol-Myers’ move to consolidate ownership of ImClone as an effort to position itself better for an eventual takeover.
If Bristol-Myers buys ImClone, it will be able to retain the 39 per cent royalty it now pays ImClone on US sales of Erbitux and win royalty revenues from Merck. A full roll-up of ImClone rather than a minority partnership would also hand Bristol access to ImClone’s pipeline of antibody drugs, its biotech manufacturing operations, and the research and development business that backs Erbitux.
ImClone’s announcement furthers the cat-and-mouse game that is now defining relations between several of the world’s largest pharmaceuticals companies and smaller biotechs.
Copyright The Financial Times Limited 2008
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