Biotechnology company Facet Biotech Corp. (FACT), said the company board recommended Thursday to its shareholders not to tender their shares at this time to the Biogen Idec Inc.'s (BIIB) today's revised tender offer of $17.50 per share. Facet said the board will advise Facet stockholders after reviewing the Biogen Idec's revised offer.
Biogen Idec had earlier today raised its offer price to $17.50 per facet share from its earlier offer price of $14.50 per facet share. Biogen in its letter to Facet's shareholders noted that the revised offer represents Best-and-Final Offer to conclude the acquisition.
Cambridge, Massachusetts-based Biogen Idec's interest in acquiring Redwood City, California-based Facet was first conveyed on August 17, 2009 by James Mullen, Biogen Idec's President and Chief Executive Officer to Facet's President and Chief Executive Officer Faheem Hasnain. This was confirmed in a letter sent to Hasnain and the Facet board on August 21 proposing a purchase price of $15.00 per share.
However, after rejecting the proposal, Facet, on August 28, announced a collaboration with Trubion Pharmaceuticals against the wishes of Biogen Idec, despite having advised Facet in its August 21 letter to not undertake any material commercial or strategic transactions prior to the consummation of a transaction with it.
As a consequence on September 4, Biogen had made an hostile bid to acquire all the outstanding shares of Facet for a price of $14.50 per facet share, just days after the Facet/Trubion tie-up for TRU-016.
Further in the letter to the Facet's shareholders Biogen said, "Taking into account its monthly cash "burn rate" and its significant lease obligations, Facet does not have the cash to fund its operations beyond 2012, well before completion of the daclizumab clinical program, without obtaining additional financing, which we believe will be dilutive."
"We already own a 50% interest in daclizumab, the drug Biogen Idec is jointly developing with Facet for the treatment of relapsing multiple sclerosis (MS). We do not intend to overpay for the rest. If Facet stockholders choose not to accept our offer, they will bear 50% of the risks associated with the development of daclizumab and 100% of the risks associated with Facet's interest in other development stage drugs," Mullen in the letter to Facet shareholders said.
Biogen's tender offer will expire on December 16, 2009.
Thursday, FACT closed at $17.23, up $0.26 or 1.53% on Nasdaq and BIIB closed at $47.38, down $0.36 or 0.75% on Nasdaq. In the after hours, FACT lost $0.48 or 2.79% to trade at $16.75.
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