Bayer bids $2.4 billion for Norwegian cancer drug partner Algeta

Tue Nov 26, 2013 1:59pm EST
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By Balazs Koranyi and Ben Hirschler

OSLO/LONDON (Reuters) - Bayer (BAYGn.DE: Quote) has offered to pay $2.4 billion for Norway's Algeta ALGETA.OL, its partner for a new prostate cancer treatment, at a 27 percent premium to the stock's last close, Algeta said on Tuesday.

The deal would boost Bayer's drugs division by giving it outright control over Xofigo, a drug the two have developed jointly since 2009 and started selling in the United States this year.

Investors, however, bet that the German drugs and chemicals group has a fight on its hands and Algeta's Chief Financial Officer said that rival bids could not be ruled out.

Algeta shares jumped by a third in early trade to a record 349.7 Norwegian crowns, well above Bayer's bid of 336 crowns.

The Norwegian company said it was in early discussions that might or might not lead to a transaction. A Bayer spokesman confirmed it had made an offer but said it did not want to provide details at this point.

The decision to go public with the preliminary offer followed a leak in the German media overnight.

Algeta CFO Oystein Soug declined to comment on the level of the bid but told Reuters that his company is under no pressure to do a deal. "I think this company has great prospects on a standalone basis," he said in a telephone interview.

Asked if another company might be in a position to counter Bayer's offer, he said: "I would not exclude that opportunity, but of course that is not my call."   Continued...

A plant belonging to Germany's largest drugmaker Bayer is seen in Leverkusen January 30, 2013. REUTERS/Ina Fassbender