So much for rumours of Swiss giant Novartis making a move on Germany’s Schering AG [[12/08/05d]]: this morning it was confirmed that Chiron Corporation is actually the object of its affection, having received a cash offer to acquire 58% of the US biopharmaceutical company’s stock for $40 per share, or $4.5 billion dollars.
The last trade on the Nasdaq stock exchange yesterday - prior to the announcement - was $36.44 dollars, but is likely to be boosted on this latest news, calling into question whether Chiron’s shareholders would be prepared to accept $40 dollars per share. Last year, the stock traded around the $44 dollar mark before the UK’s drug regulator clamped down on its flu production facilities in Liverpool [[06/10/04b]]. The FDA and the UK’s MHRA have given the go-ahead for production to re-start, although it is yet to be seen whether it will be able to supply the USA for the 2005/2006 flu season [[01/09/05]].
Novartis already owns a sizeable 42.2% chunk of Chiron, and has three directors sitting on the board. These, however, will not be party to the subsequent decisions that need to be made and Chiron says it “will thoroughly evaluate the offer in due course” alongside its financial advisors Morgan Stanley and Credit Suisse First Boston.
Chiron would prove a welcome addition to the Novartis stable, with more than 50 products on the market across the three business segments of vaccines, blood testing and biopharmaceuticals, as well as 2004 sales of $1.7 billion. Chiron has more than 5,300 employees worldwide.