Astellas launches $3.5-billion hostile bid for OSI Pharmaceuticals

Japanese pharmaceutical company Astellas Pharma Inc has launched a $3.5-billion hostile takeover bid for US drug company OSI Pharmaceuticals, a researcher and developer in molecular targeted therapies for oncology, diabetes and obesity.

Tokyo-based Astellas Pharma, Japan's second-largest pharmaceutical company after Takeda Pharmaceutical, said that it has been attempting for 13 months to engage in meaningful discussions with OSI, and its latest offer made on 12 February was rejected by OSI as ''too low.''

Astellas Pharma said that it will now take its offer directly to OSI shareholders and commence a tender offer today to acquire all the outstanding common stock of OSI for $52 per share, or about $3.5 billion in an all-cash deal.

Astellas' offer represents a premium of over 40 per cent to OSI's closing price of $37.02 on 26 February.

Melville, New York-based OSI confirmed yesterday that it has received an unsolicited proposal from Astellas Pharma and it was not interested in undertaking a sale of OSI at that price, since it believes Astellas' proposal very significantly undervalues the company.

In March 2009, Astellas Pharma had made a $1-billion hostile bid for Palo Alto, California-based CV Therapeutics, (See: Japan's No.2 drugmaker Astellas makes $1-billion hostile bid for US firm CV Therapeutics) but withdrew its four-month hostile bid after US biotechnology firm Gilead Sciences Inc made a higher offer of $1.4 billion. (See: Astellas withdraws from race to acquire CV Therapeutics)