Bristol-Myers Squibb offers 84-% premium to buy ZymoGenetics for $885 million
08 Sep 2010
US drugmaker Bristol-Myers Squibb, yesterday revealed plans to pay a whopping premium of 84 per cent to acquire biotechnology company ZymoGenetics Inc for $885 million.
Bristol-Myers is paying a premium of 84 per cent to ZymoGenetics yesterday closing share price-an amount considered too high by analysts for a company that has not made a profit since the past eleven years.
In the past 12 months, US pharmaceutical companies have announced or completed 200 acquisitions with an average value of $1.33 billion including net debt, and the average premium paid was 27 per cent above the closing price, according to Bloomberg data.
Bristol-Myers, with 2009 revenues of $18.8 billion, is paying $9.75 for each ZymoGenetics share, which closed at $5.30 in yesterday trading session. Its stock has never been traded above $10 since March 2008 and the highest it achieved was $26 way back in 2006.
The transaction is valued at approximately $885 million, or approximately $735 million net of cash acquired.
The board of directors of ZymoGenetics have unanimously approved the transaction and shareholders owning about 37 per cent of the company have agreed to support the deal.