Johnson & Johnson’s interest in Actelion as a takeover target may not yet have sparked a deal, but it has made founder and CEO Jean-Paul Clozel a billionaire.
Shares have climbed 24% since word of talks between the companies got out, Bloomberg reports, with shareholders cheering news of J&J’s initial $26 billion bid and, later, a sweetened offer. As a result, Clozel’s 5.03% stake in the Swiss biotech has climbed to $1.1 billion in value.
There’s just one issue: Clozel isn’t nearly as excited about striking a pact with the New Jersey company as his investors are. The chief exec doesn’t want to sell Actelion outright—the scenario J&J would prefer. Instead, it’s looking to join up with a piece of the pharma giant to form a new entity, of which J&J would become a major shareholder.
“He believes in an independent Actelion and he doesn’t believe in mergers just to create size,” Rx Securities managing director Samir Devani told the Financial Times of Clozel, who has already dodged an $18.9 billion bid from fellow rare-disease drugmaker Shire and recorded a 2011 triumph over activist hedge fund Elliott Advisors.
Meanwhile, Actelion’s surge in price may also have put off some other potential bidders. It’s now well out of the price range of rumored white knight prospect Novartis, for one, according to the company’s CEO.
"We have always said that we will concentrate on complementary acquisitions in the range of $2 billion to $5 billion," Novartis head honcho Joe Jimenez told Swiss Sunday newspaper SonntagsBlick.
Event-driven hedge funds, though, are still betting on an outright buy from J&J or another pharma peer. Dozens of them have socked money into the Swiss biotech firm, Reuters reports.
"This time it's different. It has not been outright rejected. That's an indication that you can go a little bit bigger," Case Equity Partners managing partner Michael Wegener told the news service.
"We don't think Clozel is going to fight," another hedge fund manager added.