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New Bid For ImClone

Bristol-Myers Squibb hikes its offer, while unnamed bidder could up the ante

by Ann M. Thayer
September 29, 2008 | A version of this story appeared in Volume 86, Issue 39

Bristol-Myers Squibb Chairman James M. Cornelius sidestepped ImClone Systems' management last week by presenting a sweetened buyout offer directly to ImClone shareholders. Bristol-Myers is now willing to pay $62.00 per share, or $4.7 billion, to buy the 83.4% of its drug development partner that it doesn't already own.

In a written response, ImClone Chairman Carl C. Icahn called the hostile offer "absurd" and said Cornelius is being misleading. Although Cornelius alleges that ImClone has resisted meaningful discussions, Icahn insisted that the company has been happy to discuss better offers.

The public haggling has gone on for nearly two months, since Bristol-Myers first made an unsolicited $60.00-per-share bid that ImClone's directors called inadequate. Soon after, Icahn, who owns about 13.5% of ImClone's stock, announced that an unnamed large pharmaceutical firm had made a conditional $70.00-per-share offer (C&EN, Sept. 15, page 20).

Apparently fed up with waiting, Cornelius wrote in a Sept. 22 letter that "bringing our offer directly to the company's stockholders allows them to evaluate the merits of our proposal." He argued that the delays and lack of transparency have created uncertainties that "could hurt the intrinsic value of ImClone's assets."

Among these assets are long-term rights to the anticancer drug Erbitux and related compounds, rights that are claimed by Bristol-Myers. Icahn, however, has stated before that he and Cornelius "disagree that Bristol's rights are clear." Erbitux sales totaled $840 million in the first half of 2008.

Meanwhile, ImClone is waiting for the higher bidder to decide whether to make a firm offer. Icahn said the unnamed company's review will be complete by Sept. 28.


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