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Merck wins Sibia tender
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September 3, 1999: 11:50 a.m. ET
$87M buyout of biotech drug maker is expected to close later this month
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NEW YORK (CNNfn) - Pharmaceutical maker Merck & Co. said stockholders in biotech firm Sibia Neurosciences have tendered 69 percent of the outstanding shares of the company, paving the way for Merck's $87 million buyout to close later this month.
Merck (MRK) paid $8.50 in cash for each share of the La Jolla, Calif.- based firm, which develops drugs for central nervous system disorders such as Alzheimer's disease and Parkinson's. That's the same price Sibia (SIBI) shares were trading at by late morning. The stock traded at 3-1/8 before the buyout was announced Aug. 2, and surged in the wake of the deal.
Merck now becomes the majority stockholder in the company, surpassing the 51 percent threshold needed to win the tender offer.
Some stockholders who refused to tender their shares said Merck's offer was too low, saying it did not take into account Sibia's future royalty gains from strategic partnerships with major drugmakers.
Private investment partnership BVP Partners L.P., which holds a 14.6 percent stake in Sibia and runs the Biotechnology Value hedge fund, refused to tender its shares. Firm associate Marc Schneidman said Friday that the fund is considering its options, which could include asking a court to force Merck to raise its per-share offer for stockholders who did not tender their shares.
"We're evaluating all of our alternatives," he said.
Sibia says Merck's offer was the best one for the firm's shareholders.
Sibia was founded in 1981 and went public three years ago. It is engaged in discovery and development of small molecule therapeutics for neurological disorders.
Merck shares rose 1-3/4 to 70 in late morning trading Friday.
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