Amgen deal for Onyx possible within week-sources

Wed Aug 7, 2013 4:34pm EDT
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By Soyoung Kim and Jessica Toonkel

NEW YORK (Reuters) - Onyx Pharmaceuticals Inc is close to selling itself to larger rival Amgen Inc as the cancer drugmaker's high stock price has discouraged other companies from making a counteroffer so far, according to three people familiar with the matter.

Amgen (AMGN.O: Quote), the world's largest biotechnology company, is in advanced discussions to buy Onyx ONXX.O, with the two sides working toward a possible announcement as soon as within the next week, the sources said on Wednesday.

Terms of an agreement have yet to be finalized, but the companies are negotiating a price of $130 per share, or nearly $9.5 billion based on shares outstanding. Onyx has indicated it would likely accept a deal at that price, the sources said.

Discussions could still fall apart, and there was no guarantee an agreement will be reached, according to the sources, who asked not to be identified because the matter is confidential.

Shares of Amgen jumped 6.8 percent to $112.40 on news of a likely deal, hitting their highest level since April. Onyx shares fell almost 3 percent to $128.21.

Representatives of Amgen and Onyx declined to comment.

A few other drugmakers including AstraZeneca Plc (AZN.L: Quote) (AZN.N: Quote) have also evaluated a deal in recent weeks but it was unclear if a rival bid would emerge, one of the people said. An AstraZeneca spokeswoman said the company does not comment on market speculation.

A deal at $130 per share would be about 8 percent higher than Amgen's initial offer of $120 per share. Onyx's board rejected that bid as too low in late June.   Continued...