Chiron's independent directors have rejected Novartis' buyout proposal, suggesting its bid to acquire the remaining 57.8% stake in Chiron is "inadequate."

The directors dismissed the bid Sept. 5.

Novartis has owned a 42% stake in Chiron since 1995. It offered to acquire the outstanding stake in Chiron for $40 per share, or $4.5 bil. in cash, on Aug. 31 (¹ Also see "Chiron Deal Offers Novartis Entry Into Vaccine Business" - Pink Sheet, 1 September, 2005.).

Chiron's independent directors appear to be seeking to up the price tag for the company. The $40 per share offer represents a roughly 10% premium over Chiron's Aug. 31 closing price of $36.44.

However, the directors noted, "we are pleased by the fact that Novartis continues to recognize Chiron's promising prospects."

Chiron has had an "ongoing dialogue" with Novartis regarding the pharmaceutical firm's intentions toward the smaller biotech company, but it has not "solicited an offer to buy Chiron," the directors added.

Chiron had recently permitted Novartis to conduct a due-diligence investigation.

Acquisition of Chiron would give Novartis access to anti-cancer and anti-infective molecules that would complement the drug maker's oncologic portfolio and infectious disease pipeline.

Chiron's anti-infective portfolio includes tifacogin and certain ex-U.S. rights to Cubist's Cubicin (daptomycin). In the cancer arena, Chiron markets Proleukin (aldesleukin) for metastatic melanoma and metastatic renal cell cancer.

Chiron would also give Novartis a quick entry to the vaccines market.

- Jessica Merrill

Chiron Seeking To Bump Up Buyout Bid? Directors Reject Novartis’ Offer

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