Novartis raises Chiron bid to $48 per share

By Elaine Rigoli

Tampa, Fla., April 3 - Novartis and Chiron Corp. have reached an agreement for Chiron shareholders to now receive $48 in cash for each outstanding share of Chiron common stock, a premium of 32% to the unaffected price of $36.44, the price before Novartis announced its initial takeover offer.

The price is up from $45 per share originally agreed and the $40 first proposed by Novartis.

Significant Chiron shareholders representing 17% of Chiron shares have advised Novartis and Chiron of their intention to vote in favor of the transaction, subject to the fiduciary and legal obligations applicable to them, according to a news release.

In addition, the transaction is now conditioned on the approval of a majority of all the outstanding Chiron shares, including the 44% held by Novartis, the release said.

To give Chiron shareholders a full opportunity to review the supplemental proxy materials, the special meeting of Chiron shareholders to vote on the merger will be held April 19 rather than April 12.

Chiron will distribute supplemental proxy materials to shareholders of record as of March 3, 2006.

ValueAct Capital, a vocal critic of the original deal terms, announced it will vote for the amended merger agreement.

"We accept the $48 offer because it is preferable to the alternative, a standalone Chiron with Novartis maintaining 44% ownership," said ValueAct Capital partner G. Mason Morfit, in a statement.

"Based on our discussions with Novartis, we believe that such an ownership structure would not be conducive to maximizing the value of Chiron's assets. We are pleased that our opposition to the original merger agreement has resulted in increased consideration for all shareholders and we will vote our shares for the deal at this revised price."

Basel, Switzerland-based Novartis develops both patented and generic pharmaceuticals.

Emeryville, Calif.-based Chiron develops biotechnology products to protect human health.

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