Mystery buyer Eli Lilly reported to outbid Bristol-Myers with $6.1 billion for ImClone

04 October 2008

After rejecting Bristol-Myers Squibb's sweetened offer of $4.7 billion at $62 a share, ImClone is in advanced talks with the mystery suitor npw identified as Eli Lilly & Co, which has made an offer of $70 a share, or $6.1 billion, media reports said quoting sources.

ImClone, has been in the acquisition market, since it rejected Bristol-Myers Squibb twice and ImClone's chairman, billionaire, corporate raider and shareholder activist Carl Icahn, rejected the offer Bristol-Myers offer saying the offer had undervalued the company and said it had received a higher offer from a large pharmaceutical company but had refused to name the suitor. (See: ImClone rejects Bristol-Myers Squibb's $4.3 billion bid; cites $6.1 billion fresh offer)

Bristol-Myers Squibb, which holds a 17-per cent stake in ImClone had been trying to acquire the remaining 83 per cent of ImClone since late July, initially offering $60 a share and later raising it to $62 a share, or $4.7 billion on September 10, 2008.

Carl Icahn, said in a statement released yesterday that a large pharma company had completed due diligence and made a proposal not subject to financing or further due diligence. Negotiations between the parties are underway, he disclosed, adding the company had requested ImClone not divulge its name until negotiations are completed.

If Lily does acquire ImClone, analysts are asking how it plans to raise $6.1 billion and whether it would use the $5.2 billion in cash, cash equivalents and short-term investments that it currently has to take this deal through.

Lily, known to be a conservative company, would find it difficult to use all the money for one acquisition, more so after they acquired biotech company 'Icos Corporation' two years back for $2.28 billion.