Celgene/Bristol-Myers Squibb: Deal has been contemplated for 'quite some time' - exec
03 JAN 2019
New York-based Bristol-Myers Squibb [NYSE:BMY], which is buying fellow cancer drug-maker Celgene [NASDAQ:CELG], had been “discussing” the potential for the transaction for “quite some time,” said the acquirer’s CEO Giovanni Caforio on today’s (3 January) conference call.
When an analyst posed a question about potential rival bidders, a Celgene executive remarked that the transaction with Briston-Myers was the best alternative for Celgene shareholders as it allows them to participate in the combined company’s future growth.
The companies announced the cash-and-stock transaction valued at about USD 74bn earlier today. Celgene shareholders will receive 1 Bristol-Myers Squibb share and USD 50 in cash for each Celgene share they hold. Bristol-Myers Squibb shareholders would own around 69% of the combined company, with Celgene shareholders owning the remaining 31%.
The deal stipulates a break-up fee as is customary in transactions of this size and nature, an executive said on the call, answering an analyst’s query. There was no collar, with the fee being a straight one-to-one exchange, an executive said in response to another question.
Celgene shareholders will also receive one trade-able Contingent Value Right (CVR) for each Celgene share they hold. The CVR will entitle the holder to a payment based on the achievement of future regulatory milestones.
Speaking on the conference call with analysts, Bristol-Myers’ Caforio also said there were no major overlaps between the two companies.
The deal is subject to regulatory approvals from the US and EC, besides other unidentified jurisdictions.