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Chiron Rejects Novartis’ Offer

This article was originally published in The Gray Sheet

Executive Summary

Chiron's board of directors has rejected Novartis' Aug. 31 offer to buy the remaining 58% of Chiron, the firm announced Sept. 5. Novartis' offer of $4.5 bil. ($40.00 per share) is "inadequate," according to Chiron's board. Chiron's stock jumped 18% from $36.44 on Aug. 31 to $42.93 on Sept. 1 and closed $42.79 on Sept. 5. Novartis bought 42% of Chiron in 1995. "Over the 10 years since Novartis has been Chiron's largest stockholder, Chiron has regularly discussed with Novartis a number of strategic initiatives," Chiron states in a release. "As a result, Chiron has had an on-going dialogue with Novartis regarding its intentions with respect to its investment in Chiron. The firm's independent directors have not, however, solicited an offer to buy Chiron." Chiron manufactures blood-testing products, including the Procleix nucleic acid testing system (1"The Gray Sheet" Sept. 5, 2005, In Brief)...

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Novartis buys Chiron

Novartis enters definitive agreement with Chiron Oct. 31 to buy the remaining 58% of the company for $45 a share, or about $5.1 bil. in cash. The deal is subject to approval of Chiron's shareholders, other than Novartis, and is expected to close in early 2006. In August, Chiron's board of directors rejected a buyout offer from Novartis of $40 per share ($4.5 bil.) (1"The Gray Sheet" Sept. 12, 2005, In Brief). On Nov. 3, Novartis announced its intention to appoint its current Global Head of Pharma Development Joerg Reinhardt, PhD, to head-up the new diagnostics and vaccines division that will be created from Chiron business units...

Chiron correction

Gen-Probe manufacturers the Procleix nucleic acid testing system, while Chiron distributes Gen-Probe's blood screening assays. "The Gray Sheet" mistakenly reported that Chiron manufacturers Procleix (1"The Gray Sheet" Sept. 12, 2005, p. 2)...

Novartis seeks Chiron buy

Novartis offers Chiron $4.5 bil. in cash for the remaining 57.8% of the company, both companies announce Aug. 31. Novartis purchased a 42.2% stake in the firm in 1995. Blood-testing products, including the firm's flagship Procleix nucleic acid testing system, accounted for $494.1 mil. of Chiron's $1.7 bil. revenue in 2004. The rest is from vaccines ($479 mil.) and biopharmaceuticals ($563 mil.). Novartis said it will seek a customary merger agreement with the independent directors of Chiron's board, but notes that the acquisition is subject to approval by a majority of the Chiron shares not owned by the Swiss firm...




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