It's the week for sweetened buyout offers. Yesterday, Sanofi-Aventis upped its price for Czech generics maker Zentiva. Today, it's Bristol-Myers Squibb boosting its bid for Erbitux partner ImClone. Bristol now sets its per-share price at $62, up from its previous bid of $60. Thanks in part to a 51-cent drop yesterday, the sweetened bid outdoes ImClone's current $59.40 stock price by more than $2. All in all, it's a $4.7 billion deal for the ImClone shares Bristol doesn't already own.
In increasing its offer, Bristol CEO Jim Cornelius wrote ImClone Chair Carl Icahn to acknowledge that the company considered its first bid to be "inadequate." Cornelius also pointed to roiled markets, saying that the "extraordinary" conditions make "an orderly and transparent process with a clearly delineated timeline" necessary for a deal. That might be a dig at Icahn's claim that he has a secret, $70-per-share buyer in the wings; Bristol's $62 bid, combined with that warning, seems to say that Cornelilus isn't convinced that such a high offer is for real.
Plus, ImClone's silence on Bristol's offer--and the identity of the mystery bidder--may compound the crazy market situation by making ImClone shareholders feel even more uncertain, "which could hurt the intrinsic value of ImClone's assets," Cornelius wrote. So, Bristol is taking its offer directly to shareholders. We'll see how Icahn--and those "uncertain" shareholders--respond now.
- check out the Bristol-Myers Squibb release
- read the Wall Street Journal story