Under the terms of the definitive agreement, BMS will commence a cash tender offer to purchase all of the outstanding shares of Inhibitex’s common stock for $26 per share. The closing of the tender offer is subject to customary terms and conditions, including the tender of a number of shares that constitutes at least a majority of Inhibitex’s outstanding shares of common stock (on a fully diluted basis) and expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The agreement also provides for the parties to effect, subject to customary conditions, a merger to be completed following the completion of the tender offer which would result in all shares not tendered in the tender offer being converted into the right to receive $26 per share in cash. The merger agreement contains a provision under which Inhibitex has agreed not to solicit any competing offers for the company. BMS will finance the acquisition from its existing cash resources. The companies expect the tender offer to close approximately thirty days after commencement of the tender offer.  

 

This offer represents a premium of approximately 126 percent of Inhibitex’s share price over the previous 20 trading days, putting it on record as the second-largest premium for a biotechnology or pharmaceutical company worth more than $500 million, according to data compiled by Bloomberg since 1999. The record is currently held by Genzyme Corp. for its 2006 deal for AnorMed Inc., with a 162 percent premium.  

 

“The deal seems a bit expensive for an early-stage compound, but there is scarcity value,” notes Funtleyder, whose fund holds BMS shares.  

 

As many as 170 million people globally carry the hepatitis C virus, and current drugs, given through injection, can have side effects that make therapy difficult to endure. The next generation is designed to be taken as pills that can offer a higher cure rate and fewer side effects.