OSI Pharmaceuticals rejects Astellas $3.5-billion hostile bid

Japanese pharmaceutical company Astellas Pharma's year-long quest to acquire US drug company OSI Pharmaceuticals received a setback on Monday after it was rejected by the board of OSI citing that its hostile $3.5-billion takeover bid undervalued the company.

With the proposed acquisition having turned acrimonious after Astellas filed a suit on 4 March in the Delaware Court seeking injunction against OSI and its directors from adopting poison-pill tactics to thwart the takeover, (See: Astellas sues OSI Pharmaceuticals for adopting poison pill tactics) OSI said that it is now looking at other potential offers that could offer a better value for the company.

The $52-per share offer at a 40-per cent premium made by Astellas is doomed to fail since OSI shares closed at $57.91 on Monday.

OSI board chairman Robert Ingram said in a statement, "After carefully analysing and considering Astellas' offer, the board has unanimously concluded that the offer does not fully reflect OSI's fundamental, intrinsic value."

Ingram added that the board has told the OSI management "to contact appropriate third parties in order to explore the availability of a transaction that reflects the full intrinsic value of the company."

On 2 March, Tokyo-based Astellas Pharma, Japan's second-largest pharmaceutical company after Takeda Pharmaceutical launched a $3.5-billion hostile takeover bid for OSI Pharmaceuticals, a researcher and developer in molecular targeted therapies for oncology, diabetes and obesity. (See: Astellas launches $3.5-billion hostile bid for OSI Pharmaceuticals)