Novartis must get Alcon IDC approval for buyout, says Swiss corporate governance expert

Fuelling further delay in Swiss drug major Novartis' plans to buy 100% of ophthalmic drugs and eye care specialist Alcon, the latter's Independent Director Committee (IDC) announced that Professor Hans Caspar von der Crone, a leading Swiss legal and corporate governance expert, has concluded that a recommendation by the IDC is an indispensable first step before the board of Alcon can decide on the merger proposal of Novartis.

This conclusion refutes Novartis' public implications that it would be able to unilaterally impose the merger irrespective of the IDC's position once Novartis becomes Alcon's majority shareholder. The argument stems from the fact that Novartis' offer to minority shareholders ' who have consistently maintained that the offer for their 23% share is 'grossly inadequate' and significantly lower than that paid to the majority shareholder, Nestle ' which holds 52% - for shares (The Pharma Letters passim).

In his legal opinion, Prof von der Crone confirmed the IDC's rights and obligations under Swiss law and, in doing so, supported many of the legal arguments previously put forth by the IDC. In concluding that 'the Alcon board will not be able to validly decide on Novartis' merger proposal without the IDC's prior recommendation of that proposal,' Prof von der Crone reasoned in particular that: