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BY OUR PHARMA CORRESPONDENT
8 September,2005: Board members of Chiron
Corporation have refused to accept the Swiss-giant
Novartis AG's offer on September 1, 2005, to
acquire the approximately 58% of Chiron shares
that Novartis does not already own for $40 per
Chiron share in cash.
Novartis already owns 42 per cent of Chiron, which
had its flu vaccine production licence revoked in
October last year after contamination problems
were discovered at its Speke plant near Liverpool.
Chiron board members also spelled out that they
had not solicited the Novartis bid. Details of a
regulatory filing Novartis made to the US
Securities and Exchange Commission (SEC) stated
that the firm was approached by unidentified,
independent Chiron board members and asked to help
overcome `serious issues'.
"After thorough analysis and consideration of
Novartis' offer to acquire the shares of Chiron it
does not already own for $40 per share in cash,
the independent directors of Chiron have
determined that this offer is inadequate," the
company said in a statement.
Novartis' offer came one day after the US Food and
Drug Administration (FDA) issued a favourable
inspection report on the Speke manufacturing
facility. Chiron says it can start supplying the
vaccine again by the 2005-2006 flu season.
With Novartis already the largest owner of Chiron,
the chances of other potential buyers entering to
stoke up a bidding war are remote.
Analysts gave a mixed reaction to the news. Some
said they were not surprised at the rebuff as the
offer only constituted a 10 per cent premium on
Chiron's share price at the time of bidding and
expected Novartis to come back with a sweetened
bid.
Helvea analyst Andrew Fellows said the $40 a share
offer values Chiron at $7.8bn, or 15 per cent
above current market cap, which "appears to be a
rich and full price".
Before its manufacturing problems, Chiron had been
expected to generate annual sales of up to $400m
from flu vaccines such as Fluvirin, but analyst
estimates have now been shaved to $200m.
BY OUR PHARMA CORRESPONDENT |
