Bayer Confirms €42.80 per Share Bid for Algeta

30.12.2013 -

Germany's Bayer finally confirmed its plans to acquire Norwegian pharmaceutical company Algeta shortly before Christmas. The German chemicals and pharmaceuticals group said Algeta's board of directors has unanimously recommended that shareholders accept a cash takeover offer priced at 362 Norwegian crowns (€42.80) per share.

Bayer said the offer implies an equity value of 17.6 billion crowns (€2.1 billion) and an enterprise value of 16.2 billion crowns (€1.9 billion). This, it said,  represents a premium of 37 % over the closing price on Nov. 25, 2013, the day before Algeta confirmed receipt of a a preliminary, non-binding acquisition proposal from Bayer that represented a premium of 48 % over the unaffected three-month volume-weighted average share price.

The German group said it has obtained pre-acceptances for around 14 % of Algeta shares, including all members of the board of directors and Algeta's largest shareholder, HealthCap IV.

The two pharma players have collaborated since 2009 in developing and commercializing Xofigo, an alpha-particle-emitting radioactive therapeutic agent for the treatment of patients with castration-resistant prostate cancer (CRPC), symptomatic bone metastases and no known visceral metastatic disease. The acquisition would give Bayer full control over Xofigo. "We are absolutely convinced of the potential of this drug and the underlying technology to provide patients with innovative treatment options," said CEO Marijn Dekkers. 

Bayer will make its offer through a subsidiary of Bayer Nordic. The success of the deal expected to close during Q1 2014 hinges on certain conditions, including a minimum acceptance level of 90% of the share capital and approval by antitrust authorities.

The new drug is one of Bayer's top five recently launched pharmaceutical products, which it believes have a total peak sales potential of more than €5.5 billion annually. Xofigo alone is projected to achieve peak annual sales of at least €1 billion if it receives marketing authorization in further indications.