Astellas Pharma Inc.,
a global pharmaceutical company, will commence a tender offer to acquire all
outstanding shares of common stock of OSI Pharmaceuticals for
$52.00 per share in cash, or an aggregate of approximately $3.5 billion on a
fully diluted basis.
The all-cash offer, set forth in Astellas' letter to OSI delivered this
morning, represents a significant premium of over 40% on the closing price of
OSI's common stock of $37.02 per share on February 26, 2010, a 53% premium to
its three-month average of $34.01 per share, and a 31% premium to its 52-week
high of $39.66 per share. Astellas' offer is not subject to any financing
The acquisition of OSI - a biotechnology company primarily focused on the
discovery, development and commercialization of molecular targeted therapies
addressing medical needs in oncology, diabetes and obesity - would support
Astellas' growth strategy of becoming a Global Category Leader in oncology.
OSI manufactures and sells Tarceva (erlotinib), a leading cancer medication
and has several prospective new oncology medications in its R&D pipeline. The
transaction would provide Astellas with a top-tier oncology business in the
U.S. and an expanded product portfolio and pipeline. OSI would also augment
Astellas' strong existing franchises in urology and immunology.
Astellas' scale and financial strength will help OSI realize the value of
its current product pipeline, as well as continue the necessary funding of its
discovery engine. Adding Astellas' strong business operations and experience
in the development and sales of new products will enable the combined company
to accelerate their development and ensure their successful commercialization.
Astellas has great respect for the OSI organization and expects to integrate
the strengths of OSI's business and employees into its operations as it has in
the past with similar strategic acquisitions.
Masafumi Nogimori, President and Chief Executive Officer of Astellas,
commenting on the offer, said, "This offer follows our attempts over the past
13 months to engage OSI in meaningful discussions. We firmly believe in the
compelling strategic rationale behind the combination and the opportunity it
provides to the OSI stockholders to realize full and fair value, in cash,
immediately. As recently as February 12, 2010, Astellas presented this
proposal to acquire OSI, which reflected a 50% premium on that date. However,
we received a response stating that our offer 'very significantly undervalues'
OSI. That response was the latest indication to us that OSI is not interested
in engaging in substantive discussions. We are therefore taking our offer
directly to OSI's stockholders. Our proposal and its significant premium
recognize both the value created by OSI to date and its future prospects. Of
course, we are open to, and we hope that OSI's Board and management will
commence, discussions with us to effect a negotiated transaction."
Astellas has made numerous attempts to engage in substantive discussions
to acquire OSI. Astellas first raised its interest in acquiring OSI during a
meeting with OSI's CEO in January 2009 and made its first written proposal in
February 2009. Despite subsequent letters reiterating Astellas' interest in
March and June 2009 and several face-to-face meetings, including a meeting
between the two CEOs on February 12, 2010, OSI has refused to engage in a
meaningful discussion. As a result, Astellas has decided to commence a tender
offer and go directly to the OSI stockholders. Astellas will consider all
means necessary to secure a completed transaction. Among other things,
Astellas intends to nominate directors at OSI's upcoming annual meeting to
give stockholders a voice in the outcome.
Astellas will commence a tender offer on March 2, 2010, to purchase all
outstanding common stock of OSI for $52.00 per share in cash. Following
successful completion of the tender offer, a merger will be completed at the
same price. The complete terms and conditions of the offer will be filed with
the U.S. Securities and Exchange Commission and disseminated to OSI
stockholders. Astellas has cash and cash equivalents on hand to complete the
transaction. The offer is not subject to any financing or due diligence
conditions, and will be subject only to customary closing conditions,
including the tender of a majority of OSI's shares of common stock on a fully
diluted basis, and OSI's Board taking all necessary actions to make its
stockholder rights plan and Section 203 of the Delaware Corporation Law
inapplicable to Astellas' offer. There are no anticipated regulatory hurdles
Citigroup is acting as exclusive financial advisor to Astellas and
Morrison & Foerster LLP is acting as legal counsel.