Bristol-Myers to buy hep C drug developer for $2.5 billion

Looking to bolster its drug pipeline in the face of US patent expiry of one of its best selling drugs, the blood thinner Plavix (clopidogrel, co-marketed with originator Sanofi), drug major Bristol-Myers Squibb (NYSE: BMY) revealed on Saturday that it has signed a definitive agreement to acquire fellow USA-based Inhibitex (Nasdaq: INHX), a developer of hepatitis C treatments, for $26.00 per share, a massive 163% premium to the latter’s closing price on Friday.

The transaction, with an aggregate purchase price of around $2.5 billion, has been approved by the boards of directors of both companies, with Inhibitex’ directors saying they will recommend the deal to shareholders. In addition, shareholders with beneficial ownership of around 17% of Inhibitex’ common stock have entered into agreements with B-MS to support the transaction and to tender their shares in the tender offer.

The transaction is expected to be dilutive to earnings for B-MS through 2016, with an expected impact on earnings per share of around $0.04 in 2012 and about $0.05 in 2013. The merger agreement contains a provision under which Inhibitex has agreed not to solicit any competing offers for the company. B-MS will finance the transaction from its existing cash resources. The companies expect the tender offer to close around 30 days after commencement of the tender offer.