The normal path of an unsolicited bid goes something like this:
Buyer approaches target; the companies may or may not talk; buyer
becomes frustrated and takes offer public; the negotiation process is
upended. But that wasn't the case with
Bristol-Myers Squibb Co.'s unsolicited play for ImClone Systems Inc.
announced July 31. Since Bristol owns 17% of ImClone and has an
operating agreement with the company, the drug giant was prohibited by
Securities and Exchange Commission rules from negotiating behind the
scenes; it had to go public with its interest in purchasing the rest of
the cancer drug company for $4.5 billion in cash. The partnership dates
back to 2001.
Because Bristol has such an intimate knowledge of ImClone, it was
able to make an offer with "very few due diligence outs," says a source
familiar with the transaction. The deal is not contingent on financing,
since Bristol has plenty of cash on hand, including funds gained from
the sale in May of its ConvaTec wound therapeutics and ostomy care
business to private equity firms
Nordic Capital and
Avista Capital Partners LP for $4.1 billion.
Continue reading below
Bristol is turning to familiar faces for its pursuit of ImClone. For financial advice, it is going with a Citigroup Global Markets Inc. team consisting of Stephen Volk, Leon Kalvaria, Vikram Bhardwaj, Christiana Stamoulis and Dave Magstadt, as well as Morgan Stanley's Peter Crnkovich, Clint Gartin and Todd Giardinelli.
The same set of firms and individual bankers advised Bristol on the
ConvaTec sale. Morgan Stanley and Citigroup were also retained by New
York-based Bristol in 2007 to fend off a possible takeover bid from
French peer Sanofi-Aventis SA. Also on board for Bristol-Myers' ImClone approach is Credit Suisse Group's Scott Lindsay, Dave Kostel, Martin Friedman and Stephanie Leouzon. Bristol most recently used Credit Suisse when it bought cancer drug maker Kosan Bioscience Inc. in May for $235 million.
For legal counsel, Bristol-Myers has opted for its go-to law firm, Cravath, Swaine & Moore LLP. The Cravath team is being led by Allen Finkelson and includes Thomas Dunn, Susan Webster, Stephen Gordon and Lauren Angelilli, who were all advisers on the ConvaTec sale.
ImClone, which hired J.P. Morgan Chase & Co. to evaluare
Bristol-Myers' offer, gave a preliminary nix to the $4.5 billion bid,
saying it "substantially undervalues" the company. Of course, with Carl Icahn as chairman, does anyone expect ImClone to immediately say yes to a deal?
"He adds a level of complexity," says a source.
