UPDATE:Astellas Launches Unsolicited $3.5 Billion Bid For OSI Pharmaceutical
March 01 2010 - 8:50AM
Dow Jones News
Astellas Pharma Inc. (ALPMY, 4503.TO) launched an unsolicited
$3.5 billion bid to buy OSI Pharmaceuticals Inc.(OSIP) for $52 a
share in cash, becoming the latest Japanese drug maker to go after
a U.S. company.
OSI shares surged in premarket trading Monday, going above the
offer price, suggesting that Wall Street speculated that a higher
offer might be needed to close the deal.
Astellas, Japan's second-biggest pharmaceutical company by
sales, said it has been attempting for 13 months "to engage OSI in
meaningful discussions," although OSI has snubbed the takeover
attempt as too low.
Officials from OSI weren't immediately available for
comment.
The offer represents a 40% premium over Friday's closing price
of $37.02. In response, OSI shares jumped 50% to $55.55 in
premarket trading, 6.8% higher than Astellas' bid.
Astellas offer comes amid continued interest from Japanese
pharmaceutical companies in the U.S., as they diversify their
business amid expiring patents at home.
Deals include Dainippon Sumitomo Pharma Co.'s (4506.TO) $2.6
billion buy of Sepracor Inc., Takeda Pharmaceutical Co. Ltd.'s
(4502.TO) $8.8 billion acquisition of Millennium Pharmaceuticals,
and Eisai Co. Ltd. (4523.TO) paying $3.9 billion for MGI Pharma
Inc.
But the effort hasn't always been successful. Astellas' offer
for OSI comes almost a year after it dropped an attempt to buy U.S.
biopharmaceutical company CV Therapeutics Inc. in a hostile
takeover bid for the heart-drug maker.
In a similar situation to OSI, Astellas sought talks with CV
until launching a $1.1 billion offer, but it was later outbid by
Gilead Sciences Inc.'s (GILD) $1.4 billion offer.
OSI's sole marketed product is cancer drug Tarceva, which it
sells with Swiss drug giant Roche Holding AG (RHHBY, ROG.VX). The
pill, used to treat lung and pancreatic cancer, had worldwide sales
of $1.2 billion in 2009
Astellas said that as recently as Feb. 12, it had tried to
acquire OSI but was told its offer "very significantly undervalues"
OSI. Astellas said it first raised interest in buying OSI in
January 2009 and made its first written proposal in February of the
same year.
"We believe there are significant benefits from OSI's
acquisition by Astellas and believe that a combined entity would
allow us to achieve the goal of discovering, developing and
delivering novel medications for patients with unmet needs in the
oncology space far better than each of our companies could do
independently," Astellas President and Chief Executive Masafumi
Nogimori wrote in a letter to OSI CEO Colin Goddard dated
Monday.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
(Nathan Becker contributed to this story)
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