By Lisa Kerner
Charlotte, N.C., Oct. 6 - Eli Lilly & Co. agreed to acquire ImClone Systems Inc. in a $70.00-per-share cash tender offer, the companies announced on Monday.
ImClone chief executive officer John H. Johnson said the $6.5 billion deal "delivers compelling and certain value" to his company's stockholders.
The per-share offer is a 51% premium to ImClone's closing stock price of $46.44 on July 30, the day before an acquisition offer for ImClone was made public.
Lilly said the offer price is also a $10.00 premium to Bristol-Myers Squibb Co.'s original offer of $60.00 per share and an $8.00 premium to its proposed tender offer price of $62.00. Bristol-Myers' tender offer was valued at $4.7 billion.
According to a Lilly news release, the transaction is not subject to any financing condition and is expected to close in either the fourth quarter of 2008 or the first quarter of 2009.
The company said it expects the transaction to be accretive to earnings on a cash basis in 2012 and on a GAAP basis in 2013.
Icahn pleased
Carl C. Icahn, chairman of ImClone's board of directors, and some affiliates holding approximately 14% of ImClone's outstanding common stock agreed to tender their shares in the tender offer.
Icahn said he was pleased with the offer.
"We came on board after a proxy contest and consent solicitation in which we criticized the old regime," Icahn said in the ImClone news release.
"Since then we were able to cut costs, substantially improve our relationship with Bristol-Myers Squibb and continue the expansion of the use of Erbitux in fighting certain cancers while developing what is a promising pipeline."
Icahn noted that in 2006 he opposed a potential transaction that would have given ImClone stockholders $36.00 per share. He was also critical of Bristol-Myers' offer for ImClone, calling it "hostile" and "absurd" in a Sept. 23 letter to the company.
However, Bristol-Myers, a New York biopharmaceutical company with a 16.6% stake in ImClone, stands to make $1 billion in cash as a result of the Lilly/ImClone merger.
"We are pleased to have initiated a process that has resulted in the substantial increase of ImClone's value for all of its stockholders," Bristol-Myers chairman and CEO James M. Cornelius said in a statement released on Monday.
"From the beginning, we had viewed our potential acquisition of ImClone as a strategically and financially sound add-on to our oncology business, consolidating a successful relationship that has extended over seven years," added Cornelius.
Bristol-Myers said it was not willing to raise its $62.00-per-share offer because it wasn't in its shareholders' best interests.
Lilly, an Indianapolis-based pharmaceutical company, was advised by UBS Investment Bank and Deutsche Bank. ImClone is being advised by J.P. Morgan.
ImClone is a biopharmaceutical company based in New York that develops targeted treatments for cancer.
| Acquirer: | Eli Lilly & Co.
|
| Target: | ImClone Systems Inc.
|
| Announcement date: | Oct. 6
|
| Transaction total: | $6.5 billion
|
| Price per share: | $70.00
|
| Expected closing: | Fourth quarter of 2008 or first quarter of 2009
|
| Stock price for target: | Nasdaq: IMCL: $64.96 on Oct. 3
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
