CORRECT: Astellas Begins $3.5 Billion Tender Offer For OSI Pharma
March 02 2010 - 1:12PM
Dow Jones News
Astellas Pharma Inc. (ALPMY, 4503.TO) officially launched its
cash tender offer Tuesday for all shares of OSI Pharmaceuticals
Inc. (OSIP) at $52 a share in cash, or $3.5 billion total.
The Tokyo-based company unveiled plans to take its bid directly
to shareholders on Monday after disclosing that it has been
attempting to reach a deal with the Melville, N.Y-based drug maker
for the past 13 months. OSI shares closed 8% above the offer price
Monday, at $56.25 suggesting Wall Street expects a higher offer
might be needed to buy the maker of the cancer drug Tarceva.
Although OSI has rejected Astellas' earlier approach, its board
hasn't responded to the tender offer and has advised shareholder to
take no action.
Astellas, Japan's second-biggest pharmaceutical company by
sales, also filed a lawsuit against OSI and its directors to stop
them from getting in the way of the tender offer, including
applying OSI's shareholder rights plan, a so-called poison pill,
arguing that any such move would be "inconsistent with the
directors' fiduciary duties."
A spokeswoman from OSI said the company has no comment on the
lawsuit or the board's review of the tender offer. Shares of OSI
recently traded up 12 cents to $56.57.
The offer is conditioned on a majority of OSI shares being
tendered and that OSI's board must redeem or invalidate the
shareholder rights plan. Astellas has said it is open to speaking
with OSI to reach a "negotiated transaction," but that the Japanese
company also intends to nominate directors at OSI's upcoming annual
meeting.
The tender offer, scheduled to expire March 31, represents a 40%
premium over Friday's closing price of $37.02.
OSI's sole marketed product is Tarceva, which it sells with
Swiss drug giant Roche Holding AG (RHHBY, ROG.VX). The pill, used
to treat advanced forms of lung and pancreatic cancer, had
worldwide sales of $1.2 billion in 2009. OSI evenly splits U.S.
profits from the drug with Roche, but receives royalties on sales
outside of the U.S.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
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