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Wed, Sep 24, 2008 - Page 10 News List

Bristol-Myers bid for ImClone jumps to US$4.7 billion

‘WASTE OF TIME’ One analyst with Rodman & Renshaw said that there was little to be gained from the bid, calling it a ‘volley of testy letters back and forth’


Bristol-Myers Squibb Cos raised its bid for ImClone Systems Inc to US$4.7 billion and said it would take the offer directly to shareholders of its partner on the cancer drug, Erbitux.

Bristol-Myers said it would tender US$62 a share, up from US$60 a share, for the 83 percent of the company it doesn’t already own. ImClone rose 4.3 percent to US$62 after the statement in extended trading on the NASDAQ Stock Market after closing on Monday at US$59.40. The offer is a 33 percent premium over the company’s price before Bristol-Myers initial bid on July 31.

The companies have argued over the value of ImClone and the rights to a successor to Erbitux, ImClone’s lone product, which had US$1.3 billion in sales last year. Massachusetts-based ImClone sells the treatment for drug-resistant head, neck and colon cancers with Bristol-Myers in the US and with Merck KGaA elsewhere.

The Bristol-Myers’ offer is “a waste of time,” Michael King, an analyst with Rodman & Renshaw Inc in New York, said in an e-mail on Monday. “All that will happen as a result of this is another volley of testy letters going back and forth.”

Bristol-Myers said that ImClone has suffered a “protracted period of uncertainty” since the first offer was rejected and ImClone chairman Carl Icahn said an unnamed bidder was willing to offer US$70 a share.

Bristol-Myers’ financial advisers have tried without success to conduct discussions with ImClone, James Cornelius, Bristol-Myers chairman and chief executive officer, wrote in a letter to Icahn.

“Particularly in light of the current extraordinary market conditions, there needs to be an orderly and transparent process with a clearly delineated timeline in order to expedite a resolution of ImClone’s future,” Cornelius wrote in the letter released on Monday.

Bristol-Myers also said it planned to file papers with the Securities and Exchange Commission to remove ImClone’s directors and replace them with nominees of its own choosing.

Icahn is unlikely to agree to the US$62 offer and a third bidder may emerge with a “significantly higher” offer, Eric Schmidt, an analyst at Cowen & Co, said in an e-mail.

“I suspect ImClone shares will trade above US$62 a share in the morning,” he said.

In rejecting the initial offer, Icahn disputed Bristol-Myers’ claim to an experimental cancer drug that is considered a next generation Erbitux.

In a letter released on Sept. 11, Icahn threatened to sell the company’s experimental drugs without sharing any of the profit. Bristol-Myers said it also owns US marketing rights to the new drug, known as IMC-11F8.

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