Wall Street sees Astellas nabbing OSI for up to $4.3B

It's been a month and a half since Astellas launched its hostile bid for OSI Pharmaceuticals, and so far, few rival bidders have stepped up to rescue OSI from that $52-a-share bid, investment sources tell Reuters. Analysts now are predicting that no white knight will come into the picture to bid against Astellas--but that the Japanese drugmaker will raise its offer anyway.

Astellas came out with its hostile bid March 1, only to be quickly rebuffed by OSI. The latter's board called the $3.5 billion offer inadequate, and almost immediately OSI shares climbed to around $59. OSI said it would entertain other offers.

Then, OSI allowed Astellas to take a peek at its books, touching off speculation that Astellas would find justification there for raising its offer. After all, Astellas is pretty determined to boost its presence in the U.S. oncology market, and OSI's Tarceva would be a big step in that direction. Now, the same dynamics are working behind the scenes to firm up predictions of an Astellas-OSI marriage. 

Indeed, the consensus among investment bankers who spoke to Reuters was that Astellas will hike its bid to as high as $60 per share, because OSI stock has been trading in that territory for a while. "I think Astellas gets the deal done at $57 to $60 a share, which is about where the market is now," one banker told the news service. Analysts agree. "I think the deal gets done higher," RBC Capital Markets analyst Jason Kantor says. What do you think?

- read the Reuters piece

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