Actelion/Sanofi considering various deal structures – sources
An agreement could be reached by the new year
Door left open for J&J re-bid
Actelion [VTX:ATLN] and Sanofi SA’s [EPA:SAN] ongoing talks are considering various deal structures, according to a source close to the deal. An agreement between the two companies could be reached before the new year, they added.
For the moment, the talks are friendly with the French drug company more interested in a full takeover of Actelion than other options, the first source said.
A contingent value right (CVR), a pay out that hinges upon some pipeline drugs' future performance, could be included as part of a USD 275 per share bid and is the focus of the talks, Bloomberg reported last week.
The sources declined to comment further on valuation. For Sanofi, it is not so much a question of financial fire power, but more a question of valuation, a second source emphasised.
A two-part deal structured initially with a stake sale is viewed as less likely, both sources said.
The second source said it would require a more complex structure. Actelion would have to hold an AGM and vote on new shares issuance, this source said, then it would have to acquire more than the 33% ownership threshold to launch a new mandatory offer.
It is still too early to tell when an agreement will be reached. It will probably not be before Christmas, the first source said. For a deal to happen it requires two principles to reach agreement and then a breakthrough. But a deal taking place before the New Year would be a more realistic timeframe, he pointed out.
Another approach from Actelion’s former suitor Johnson & Johnson’s [NYSE:JNJ], who ended talks with the Swiss company on 14 December, would not be impossible, the sources agreed.
The failed talks with J&J were down to a combination of price and structure, the second source said. J&J ending talks last week does not mean the door is shut for good, this source speculated.
Swiss takeover rules preserve the target company’s right to respond to unsolicited approaches with regards to a competing offer. Even after a bid is agreed, there should typically be an exit clause for a competing offer.
It is unclear whether the withdrawal was just a tactical move from J&J, but it would not be unheard of, the first source said.
Actelion, J&J and Sanofi had no comment. Actelion shares closed at CHF 214 on Monday.