Buyout battle put on hold as Astellas gets a peek at OSI's books

Astellas Pharma and OSI Pharmaceuticals have come to a truce. Under a confidentiality agreement, OSI will open its books to the Japanese drugmaker, which recently made a hostile bid for the U.S. company. In return, Astellas promises that it won't buy any more OSI shares, press its lawsuit against the company, or push forward on a proxy fight.

Astellas is keen to buy OSI, partly for OSI's cancer treatment Tarceva and partly for its pipeline. The Japanese company made an offer directly to management, but OSI summarily rejected it. So Astellas took its case to the shareholders with a $3.5 billion, $52-per-share hostile bid. OSI's board once again rejected the offer and advised shareholders to do the same; Astellas struck back, suing OSI to stop it from using its poison pill.

Now, peace--at least for the six-week duration of this standstill agreement. By then, Astellas may have found reason enough to boost its offer for OSI, and OSI may actually be considering it. "This is a step forward for Astellas as it looks like OSI caved in to the pressure and changed its stance to consider a potential sale," Japan Advisory analyst Mitsuo Ohmi tells Bloomberg. Will Astellas be able to press its case?

- see the agreement
- read the Bloomberg story
- get more from the Wall Street Journal

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