Drug developer Genzyme Corp. escalated a bidding war over AnorMed Inc. Tuesday, proposing a $580 million buyout for the Canadian drug company and topping a standing bid from Millennium Pharmaceuticals Inc.
The new proposed bid, which amounts to $13.50 per share, pushes past a $12-per-share, or $515 million bid by crosstown neighbor Millennium. AnorMed has already recommended the Millennium offer to its shareholders. In a statement, Genzyme said it is prepared to formally offer the bid, following a support agreement with the company.
"We are confident that AnorMed's shareholders will find this all-cash offer of $13.50 per share to be a compelling one that fairly rewards them for the value they have created through the development of Mozobil to date," said Henri A. Termeer, chairman and chief executive of Genzyme.
Genzyme's last offer of $8.50 per share was rejected by the company, at which point Genzyme brought the buyout deal directly to shareholders. That offer was set to expire but was extended to Oct. 23. At the same time, Millennium came in with its current bid.
The company said it raised the bid after studying the prospects for AnorMed's late-stage drug Mozobil, for cancer patients undergoing stem cell transplants. AnorMed called the drug promising and said it would commercialize the drug through its existing global transplant business.
AnorMed has until 4 p.m. Oct. 11 Pacific Time to make a decision on the new offer. If it agrees the offer is superior to Millennium's current bid, AnorMed would then have until Oct. 17 Eastern Time to enter into a support agreement. With that support agreement in hand, Genzyme said it would formally increase the bid to $13.50 per share and extend the offer to the morning of Nov. 1.
Millennium's offer is set to expire Nov. 10.
Genzyme's current offer of $8.55 per share is still open for acceptance until Oct. 23.
Shares of Genzyme fell $1.07 to $68.43 in on the Nasdaq while shares of AnorMed rose 55 cents, or 4.1 percent, to $13.85 in morning trading. Shares of Millennium fell 2 cents to $10.02 on the Nasdaq.
The new proposed bid, which amounts to $13.50 per share, pushes past a $12-per-share, or $515 million bid by crosstown neighbor Millennium. AnorMed has already recommended the Millennium offer to its shareholders. In a statement, Genzyme said it is prepared to formally offer the bid, following a support agreement with the company.
"We are confident that AnorMed's shareholders will find this all-cash offer of $13.50 per share to be a compelling one that fairly rewards them for the value they have created through the development of Mozobil to date," said Henri A. Termeer, chairman and chief executive of Genzyme.
Genzyme's last offer of $8.50 per share was rejected by the company, at which point Genzyme brought the buyout deal directly to shareholders. That offer was set to expire but was extended to Oct. 23. At the same time, Millennium came in with its current bid.
The company said it raised the bid after studying the prospects for AnorMed's late-stage drug Mozobil, for cancer patients undergoing stem cell transplants. AnorMed called the drug promising and said it would commercialize the drug through its existing global transplant business.
AnorMed has until 4 p.m. Oct. 11 Pacific Time to make a decision on the new offer. If it agrees the offer is superior to Millennium's current bid, AnorMed would then have until Oct. 17 Eastern Time to enter into a support agreement. With that support agreement in hand, Genzyme said it would formally increase the bid to $13.50 per share and extend the offer to the morning of Nov. 1.
Millennium's offer is set to expire Nov. 10.
Genzyme's current offer of $8.55 per share is still open for acceptance until Oct. 23.
Shares of Genzyme fell $1.07 to $68.43 in on the Nasdaq while shares of AnorMed rose 55 cents, or 4.1 percent, to $13.85 in morning trading. Shares of Millennium fell 2 cents to $10.02 on the Nasdaq.
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