Schering-Plough dips but gets European go-ahead to buy Organon; Sallie Mae up as other investors circle

By Sheri Kasprzak

New York, Oct. 11 - Schering-Plough Corp. grabbed headlines Thursday with news that a European entity has given the green light to its plans to buy Organon BioSciences, NV from Akzo Nobel N.V.

But Schering-Plough stock was lower on Thursday.

In other news, SLM Corp., also known as Sallie Mae, saw it stock lifted Thursday by news that other investors may be interested in acquiring the company even as its planned $25 billion buyout with an investor group led by J.C. Flowers & Co. is growing ever more contentious.

Even though the buyers are looking, they may not be able to touch until things settle down with Flowers and the consortium of potential buyers.

"It's good that other buyers are looking at them because this thing with their current buyers may not work out," said an analyst watching with the goings-on. "It's a total mess right now so I think the likelihood that it will work is actually very slight so it's good that they've got alternatives."

Elsewhere in merger news, an independent proxy advisory company suggested Thursday that Hologic, Inc. shareholders approve that company's planned $6.2 billion merger with Cytyc Corp.

Shares of Hologic and Cytyc were up on Thursday.

Schering-Plough to move ahead with merger

Looking back at the Schering-Plough merger with Organon BioSciences was approved Thursday by the European Commission.

Organon is comprised of a human pharmaceutical business and an animal health sector. In connection with the merger, Schering-Plough has agreed to divert certain of its animal health products to Europe.

The deal is not done yet though. The merger must still get clearance from the U.S. Federal Trade Commission. The merger is expected to wrap up by the end of the year, a statement released Thursday by Schering-Plough said.

Schering-Plough is headquartered in Kenilworth, N.J.

The drugmaker's stock was down Thursday by 9 cents, or 0.28%, to close at $32.25 (NYSE: SGP). In after-hours trading, the stock climbed by 5 cents.

SLM attracts other potential buyers

Elsewhere, Sallie Mae said other investors are showing an interest in buying the student loan provider.

SLM's shares were up 13 cents on Thursday on the news that other investors are checking them out. The stock ended the day at $48.76 (NYSE: SLM).

Sallie Mae is currently in troubled talks for a $25 billion buyout with a consortium led by J.C. Flowers & Co., a private equity firm.

An analyst said Thursday afternoon that the fact that other buyers are looking is a good thing, especially since the deal with Flowers and the other investors is not looking so good.

The bone of contention between Sallie Mae and Flowers is the Higher Education Access Act, a bill that will cut subsidies to student loan providers.

Flowers has argued that it has the right to pull out of the deal because the bill has negatively impacted Sallie Mae's earnings. Sallie Mae has acknowledged that the bill would impact its earnings by between 1.8% and 2.1% over the next five years but says that is not enough to release the buyers from the merger agreement.

Earlier this week, Sallie Mae took the consortium, which also includes Bank of America Corp. and JPMorgan Chase & Co., to court over the troubled deal.

ISS suggests Hologic shareholders back merger

In other merger news, Institutional Shareholder Services, an independent proxy advisory service, suggested Thursday that shareholders of Hologic approve its merger with Cytyc in their planned $6.2 billion transaction.

"ISS is influential but that doesn't necessarily mean that's the way the shareholders are going to vote," said one sell-side trader on Thursday. "It's a bargain for Hologic so of course it's good for them. My bet is the shareholders will approve it but they probably would have done that regardless."

The offer was first made in May, when Cytyc's stock was trading at around $43 per share. The $16.50 per share price tag is a 61% discount to the company's $43 closing stock price on May 21.

Shares of both companies were higher in trading Thursday.

The news comes just a few days after pharmaceutical giant Johnson & Johnson slapped Hologic with a lawsuit, claiming the medical imaging equipment maker violated some of its patents for a tumor-detection system.

By 11:30 a.m. ET, Hologic's stock was up 80 cents, or 1.22%. The stock ended the day up $0.98, or 1.50%, to close at $66.35 (Nasdaq: HOLX).

Shares of Cytyc were up 57 cents, or 1.14%. The stock closed up 73 cents, or 1.46%, at $50.85 (Nasdaq: CYTC). After hours, though, the stock gave up those 73 cents.

In the offering, shareholders of Cytyc will receive 0.52 shares of Hologic and $16.50 in cash per share in a deal valued at about $6.2 billion.

"We appreciate the support that ISS has given to our combination with Cytyc and to Hologic's stock plan," said Jack Cumming, Hologic's chief executive officer, in a statement.

"Together with Cytyc, we will be a global leader in women's healthcare. We look forward to realizing the many benefits this combination creates."

Hologic's shareholders will conduct a meeting on Oct. 18 to discuss the vote.

Hologic, headquartered in Bedford, Mass., develops diagnostic and medical imaging systems.

Shareholders OK BancTrust, Peoples merger

Finally, BancTrust Financial Group, Inc.'s shareholders gave the go-ahead to its merger with Peoples BancTrust Co., Inc.

Shares of BancTrust closed down 20 cents at $15.93. After hours, the stock gained 11 cents (Nasdaq: BTFG).

Peoples' stock gained 10 cents to end at $23.23 (Nasdaq: PBTC).

In the merger, BancTrust will pay Peoples' shareholders $6.375 in cash plus 1.0614 shares of BancTrust stock for every Peoples' share.

BancTrust obtained a credit facility to fund the $38 million cash portion of the merger.

The transaction is slated to close Oct. 15.

Once the merger is completed, BancTrust will be one of the five largest publicly traded bank holding company headquartered in Alabama. BancTrust is headquartered in Mobile.

Peoples BancTrust is a Selma, Ala.-based bank holding company.

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