Astellas secures acquisition of OSI Pharma, raising its offer to $4 billion

Japanese drug major Astellas Pharma late Sunday night said it has finally reached agreement to acquire the US biotechnology firm OSI Pharmaceuticals, after more than a year of overtures. The latter had previously rejected Astellas' formal bid earlier this year, saying that the $3.5 billion ($52 per share) offer did not reflect OSI's true value, and set about finding a 'white knight' rescue, which failed to materialize (The Pharma Letters passim).

Under the terms of the merger deal, Astellas will sweetend its offer price to $57.50 per share, which represents a premium of 55% to the closing price for OSI's shares of $37.02 on February 26, 2010, the last trading day before the announcement by Astellas of its tender offer. However, this is still lower than OSI's Friday closing price of $59.80 in New York, when the stock jumped 4.4% on speculation of a raised bid from Astellas. The boards of directors of both companies have unanimously approved the combination. The all-cash transaction is valued at $4.0 billion on a fully diluted basis, an increase of around 10.5% on the original offer.

Prize is cancer drug Tarceva