Novartis may come to regret its lower-than-expected offer to Alcon's (NYSE: ACL) minority shareholders. A legal expert hired by the board's independent director committee has decreed that the group has to back Novartis' offer for the buyout to go through--and the committee is still saying that the offer is too low.
Novartis agreed to buy Nestlé's stake in the eye care company, leaving some 23 percent of Alcon shares in the hands of minority stockholders. Novartis offered to buy those shares, too--but at a price substantially lower than it would pay for Nestlé's. The Alcon board committee protested; Novartis stood firm.
Now, that committee has Swiss merger law on its side, at least according to legal expert Hans Caspar von der Crone. "The Alcon board will not be able to validly decide on Novartis' merger proposal without the IDC's prior recommendation," the professor says in a statement. Kepler Capital Markets analyst Tero Weckroth writes in a note to investors (as quoted by Reuters): "After this news, it looks increasingly likely that Novartis will need to either increase its bid for the remaining shares or, alternatively, drop plans for a full merger."