Rejecting J&J could leave Actelion with 'lot of explaining to do'

Wed Nov 30, 2016 9:35am EST
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By John Miller and Anjuli Davies

ZURICH/LONDON (Reuters) - Some Actelion shareholders would be attracted by a $27 billion bid for the Swiss biotech company from Johnson & Johnson, leaving Chief Executive Jean-Paul Clozel with some explaining to do if he turned down an offer around that level.

One source familiar with the matter has told Reuters the two companies are discussing a bid close to that price, or 250 Swiss francs per share.

That would be a 60 percent premium to Actelion's market value before the companies confirmed last week they were in talks, and tempting for shareholders who would prefer to cash in now rather than bet on an uncertain future.

"If I look at the (drugs) pipeline that Mr. Clozel is excited about, I am perhaps less excited about it and see perhaps a greater risk than reward," said Eleanor Taylor Jolidon, a fund manager at Union Bancaire Privee in Geneva, which is among the top 40 investors in Actelion and holds 0.23 percent of outstanding shares, according to Reuters data.

An offer around 250 francs per share would be "something we could start looking at", Taylor Jolidon said. Should Clozel reject such a price, she added, "he would have a lot of explaining to do."

Clozel has, in the past, guarded Actelion's independence, helped by fellow shareholder Swiss billionaire Rudolf Maag and a supportive Swiss investor base.

In 2011, for example, he fended off a campaign by U.S. hedge fund Elliott Advisors to put the company up for sale. At the time, Elliott suggested Actelion was worth 70 francs per share, about a third of its current price.

And in 2015, Clozel reportedly saw off bid interest from British drugmaker Shire.   Continued...

A general view shows Swiss biotech group Actelion Headquarters in Allschwil near Basel February 17, 2015.   REUTERS/Arnd Wiegmann