Fight for Facet Biotech continues as Biogen goes hostile and Facet makes deal with Baupost

Continuing its bid to take control of fellow USA-based Facet Biotoech, Biogen Idec declared yesterday that it is prepared to run a proxy contest to replace at least a majority of Facet's board of directors who have persistently rejected its advances, if Facet shareholders tender a majority of the company's shares outstanding before Biogen Idec's tender offer expires.

Biogen reiterated that its all-cash $17.50 per share tender offer for Facet represents its best-and-final offer, valuing the firm at around $356 million. Biogen believes its offer fairly values Facet. However, according to a Merriman Curhan Ford & Co analyst, Biogen needs to raise its unsolicited takeover bid for Facet to at least $22 a share to succeed.

Meantime, Facet announced that, in response to a request from the Baupost Group, the company has agreed to amend its Rights Agreement to permit Baupost to purchase a number of additional shares without the rights under the Rights Agreement becoming exercisable. Baupost beneficially owned 3,506,875 shares of Facet common stock on December 16, 2009, which represents approximately 14% the total shares outstanding. The amendment will increase the ownership limit for Baupost from 15% to 20%. As part of this arrangement, Baupost has agreed that it will vote any shares it owns in excess of 15% either in the same proportion as other Facet stockholders or in accordance with the recommendation of Facet's board, at Baupost's election.