Biogen bids low for Facet; Sun deal seen closing by year end; Metavante buyout set to close

By Cristal Cody

Tupelo, Miss., Sept. 4 - Biogen Idec Inc. on Friday offered to buy out Facet Biotech Corp. for $14.50 a share in cash, 50 cents lower than an original offer made last month because of Facet's deal with another company.

Although Biogen's offer represents a 64.00% premium to Facet's closing stock price on Thursday, it's a cheap takeover price at about $355 million, an analyst told Prospect News on Friday.

Meanwhile, as the market continued to digest the news that the European Union would extend its review of Oracle Corp.'s $7.40 billion takeover of Sun Microsystems, Inc., one analyst said Friday the deal could close ahead of a Jan. 19 decision deadline.

In other situations, Fidelity National Information Services, Inc.'s acquisition of Metavante Technologies, Inc. is set to close on Oct. 1 after regulators and shareholders of companies cleared the merger.

On Wall Street, stocks closed up ahead of the long holiday weekend.

The Dow Jones Industrial Average gained 96.66 points, or 1.03%, to 9,441.27.

The Standard & Poor's 500 index rose 13.16 points, or 1.31%, to 1,016.40, while the Nasdaq Composite index closed up 35.58 points, or 1.79%, at 2,018.78.

The markets are closed on Monday in observance of Labor Day.

Biogen scouts for cheap deals

Facet shares soared $6.56, or 74.38%, to close at $15.38 on Friday.

Biogen's offer represents a 64.00% premium over Facet's closing tock price of $8.82 on Thursday, but the bid still is low, Jason Kantor, an analyst with RBC Capital Markets Corp., said in an interview on Friday.

"Biogen is trying to get the asset on the cheap because Facet has been trading at a discount to its cash value," Kantor said. "The dollar value they're offering is a big premium to the current stock price but it's not a big premium to the current enterprise value."

Facet directors rejected Biogen's first offer of $15.00 a share that was made last month.

In a statement on Friday, Redwood City, Calif.-based Facet said that Biogen's first offer was not in shareholders' best interest, but it will respond promptly to the second bid. Facet said the first offer placed negligible value on the company's drug pipeline.

Biogen and Facet, which was formed in December as a spin-off from PDL BioPharma, Inc., have partnered since 2005 on the development of drug programs for cancer and multiple sclerosis.

Cambridge, Mass.-based Biogen said in a statement Friday that the company made a firm buyout offer of $15.00 a share on Aug. 21 in a letter sent to Faheem Hasnain, Facet's president and CEO.

"The August 21 letter stated that it was very important to Biogen Idec that Facet not undertake any material commercial or strategic transactions prior to the consummation of a transaction with Biogen Idec," Biogen said.

On Aug. 28, Facet announced collaboration with Trubion Pharmaceuticals Inc. to jointly develop and market an experimental blood cancer drug.

Biogen said the partnership reduces Facet's value, and noted the stock has fallen 22.00% since the transaction was announced.

"We are deeply disappointed Facet chose to announce a collaboration with Trubion on the day you and I were scheduled to discuss Biogen Idec's all-cash proposal to acquire Facet, which you rejected on August 25," Biogen president and chief executive officer James C. Mullen said in a letter sent Friday to Facet's board of directors.

Kantor said a combination makes sense since the two already partner for drug development programs.

"By acquiring their partner, it consolidates future economics by not owing royalties back to Facet," he said.

Biogen's stock closed up $1.10, or 2.20%, at $51.01.

Shares of Seattle-based Trubion climbed 40 cents, or 7.87%, to $5.48.

Incline Village, Nev.-based PDL's stock rose 17 cents, or 1.91%, to $9.06.

Sun buyout pegged for early close

The European Commission's decision on Thursday to conduct an in-depth investigation into Oracle's takeover of Sun Microsystems over competition concerns pushed the regulator's approval deadline to Jan. 19.

Santa Clara, Calif.-based software maker Oracle and Redwood Shores, Calif.-based Sun had expected the acquisition to close in August.

The $9.50-a-share cash deal still could close this year, Krisztian Szentessy, an analyst with Pali Capital Inc., said in a research note on Friday.

Szentessy estimates the transaction could settle in mid-December since "several transactions have been approved prior to the provisional deadline."

If Oracle "fully cooperates with the E.U.," the review period could be shorter, Szentessy said.

The U.S. Department of Justice and Australian regulators approved the acquisition in August.

The transaction also requires regulators' approval in Canada, China, Israel, Switzerland, Russia, Turkey, Korea, Japan, Mexico and South Africa.

The chances for the deal falling apart are pegged at less than 5%.

"In our view, the E.U. is likely to approve the transaction unconditionally," Szentessy said. "We believe that remedies, if they are required, would be difficult but not impossible to structure."

Sun's stock closed unchanged on Friday at $9.15.

Oracle shares added 41 cents, or 1.90%, to close at $21.97.

Fidelity gets all clear

Metavante shareholders on Friday approved the company's buyout, while Fidelity National investors also voted Friday to release the stock needed to complete the deal.

Fidelity National agreed in April to acquire Metavante for about $2.94 billion in stock. Under the terms of the deal, Metavante shareholders will receive 1.35 shares of Fidelity National for each share of Metavante.

On Thursday, the credit card and payment processing companies said the deal had received antitrust clearance from the U.S. Department of Justice.

Jacksonville, Fla.-based Fidelity National now expects the acquisition of Milwaukee-based Metavante to close Oct. 1.

Metavante shares lost 18 cents, or 0.55%, to end at $32.48 on Friday.

Fidelity National's stock slipped 15 cents, or 0.62%, to $24.18.

Mentioned in this article:

Biogen Idec Inc. Nasdaq: BIIB

Facet Biotech Corp. Nasdaq: FACT

Fidelity National Information Services, Inc. NYSE: FIS

Metavante Technologies, Inc. NYSE: MV

Oracle Corp. Nasdaq: ORCL

PDL BioPharma, Inc. Nasdaq: PDLI

Sun Microsystems, Inc. Nasdaq: JAVA

Trubion Pharmaceuticals Inc. Nasdaq: TRBN

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.