Astellas Launches Proxy Battle

Astellas Launches Proxy Battle

You'll remember that Astellas made a hostile offer for OSI Pharmaceuticals earlier in the month.  Along with their offer, they sued in Delaware to get the OSI board to consider the offer.  Well, the board has considered the offer ($52/sh cash, a 40% premium) and has rejected it.  Here's part of their statement:

"After carefully analyzing and considering Astellas' offer, the Board has unanimously concluded that the offer does not fully reflect OSI's fundamental, intrinsic value. We believe that OSI is a unique asset - the only profitable, mid-cap biotech company with a growing, high quality and fully integrated oncology franchise and a strong diabetes and obesity franchise which also has a proven track-record of success. The OSI Board takes its fiduciary duties seriously and will continue to do what's right for OSI stockholders. In that regard, the Board of Directors has instructed OSI management, with the assistance of the Company's financial advisors, to contact appropriate third parties in order to explore the availability of a transaction that reflects the full intrinsic value of the Company.".

The full text of the OSI board's letter to shareholders can be found here.

None too happy with that response, Astellas has now launched a proxy battle at the next annual shareholders meeting of OSI - putting up a slate of 10 director nominees whose jobs it will be to deliver the company to Astellas.  OSI responded this morning by simply stating, "OSI believes the Astellas director nominees' only mandate is to support Astellas in acquiring OSI at an inadequate price."  OK, so not a full-throated endorsement.

This is starting to have the feel of the 1980s again.  Who said the hostile acquisition was dead?!

Read more about Mergers & Acquisitions at the M&A Law Prof Blog.