ImClone rejects $60 per share offer; Blackstone shops for theme parks; PeopleSupport jumps on Aegis buy

By Aaron Hochman-Zimmerman

New York, Aug. 4 - ImClone Systems Inc. kicked back the $60 per share offer from Bristol-Myers Squibb Co. after its stock traded through the offer price almost immediately last Thursday.

The share price remained between $64 and $65 per share as investors, including chairman Carl Icahn, expect to see a better offer from the New York-based pharmaceutical giant.

Also from New York, the Blackstone Group began planning a summer trip to some of Anheuser-Busch Cos. Inc.'s amusement parks with intentions to buy.

Bud's new owner, Belgium's InBev NV has said it plans to cut loose from its portfolio.

Elsewhere, a buyout offer of $12.25 from India's Aegis BPO was enough to launch PeopleSupport Inc.'s shares up by over 25% in Monday's trading.

Meanwhile, the Dow Jones Industrial Average ended lower by 42.17, or 0.37%, at 11,284.15, while the Nasdaq Composite Index gave up 25.40, or 1.10%, to finish at 2,285.56.

The S&P 500 dropped 11.30, or 0.90%, to close at 1,249.01.

ImClone, Icahn pass on first offer

ImClone told its part owner, Bristol-Myers Squibb, that its $60 per share offer will not be enough for the 83% of ImClone it does not already own, according to an ImClone press release.

After the $4.5 billion offer was announced on Thursday, ImClone began trading as though investors expected a higher offer. During that session, ImClone shares (Nasdaq: IMCL) jumped from $45.35 per share to $65.00 per share and then traded as high as $65.47 on Friday.

ImClone's Monday response to Bristol-Myers' offer does not preclude a transaction, but did state that "the board's preliminary view is that the offer substantially undervalues ImClone," the statement said.

Separately, ImClone's chairman Carl Icahn endorsed the rejection.

"The offer was a little bit low given some of the other buyouts," Summer Street Research Partners analyst Carol Werther said about AstraZeneca plc's purchase of Medimmune and Takeda Pharmaceutical Co. Ltd.'s acquisition of Millennium Pharmaceuticals.

"There's a lot of different ways you can get to a higher number," she said, adding that a 50% premium arriving at an offer price of $65 to $70 per share is a credible offer.

Also in the statement, ImClone discussed the possibility of breaking off its division which produces the successful cancer fighting drug Erbitux.

"Based upon preliminary internal data, and recognizing that the pipeline products are in various stages of development, the board still believes that the company's pipeline business may be extremely valuable and significantly increase stockholder value as a separate business," the statement said.

"What's difficult for both Genentech Inc. and ImClone is that they have pretty interesting pipelines," Werther said, although, in usual cases, the pipeline is not given much value until it is farther along in the testing process.

Still, "I had never heard that before today," she said about splitting off Erbitux.

On Monday, shares of ImClone closed lower by $0.31, or 0.47%, to end the session at $65.03.

Shares of Bristol-Myers Squibb (NYSE: BMY) tacked on $0.28, or 1.33%, to finish the day at $21.39.

Big boost for PeopleSupport

PeopleSupport was not in need of help from anyone on Monday as its shares went off to the races on the news that the company will be bought by Aegis BPO at $12.25 per share, according to a press release.

The merger of outsourcing conglomerates comes at a 29% premium to PeopleSupport's Friday closing price.

"PeopleSupport has pioneered the development of offshore BPO in the Philippines and Costa Rica, and we are excited to become a part of a global outsourcing leader," said Lance Rosenzweig, PeopleSupport chief executive officer and chairman in a statement.

"We believe that this combination will deliver superior value to PeopleSupport's stockholders and customers as well as provide our employees with an opportunity to be part of a larger enterprise and to explore career opportunities in new geographies," he added.

The deal's completion is still subject to PeopleSupport shareholder approval.

However, "the addition of PeopleSupport's high performance operations in the Philippines and Costa Rica will enable Aegis BPO to become a leader in the global BPO market," said Aparup Sengupta, global chief executive officer and managing director of Aegis," in the statement.

"We share many common values, namely our dedication to customer excellence, thriving on innovation and building a people culture," he added.

Shares of PeopleSupport (Nasdaq: PSPT) soared $2.42, or 25.39%, to close at $11.95.

The deal is expected to close in either the third of fourth quarter of 2008.

Blackstone lines up for parks

After InBev successfully brought Anheuser-Busch to the bargaining table, Blackstone has now arrived to discuss the future of Anheuser-Busch's theme parks, according to a report in the United Kingdom's Daily Telegraph.

The parks, including Sea World and Busch Gardens, have an estimated value between $2.5 billion and $4.5 billion, a market source said.

InBev is expected to divest the parks as it completes its acquisition, the source said.

Shares of Blackstone (NYSE: BX) shed $0.44, or 2.40%, to finish at $17.93.

Shares of Anheuser-Busch (NYSE: BUD) inched up by $0.28, or 0.41%, to end the day at $68.05.

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