Novartis currently holds a 42.2% stake in the US biopharmaceutical company and has submitted a proposal to acquire the approximately 112 million fully diluted shares of Chiron for $40.00 per share in cash, making a total of $4.5 billion.
This offer was made after Novartis recently conducted due diligence on Chiron with the agreement of the company’s independent directors. Although Chiron is set to consider the offer, analysts think that the Swiss drug maker may have to raise its offer slightly.
Chiron’s share price has fallen over the last year, ever since the company was forced to halt production of its flu vaccines Begrivac and Fluvirin at two of its factories in Germany and the UK amid contamination concerns. However, the Novartis offer comes in the wake of a positive FDA report into the Liverpool factory that suggests that Chiron may yet be able to supply its vaccine for the forthcoming flu season.
Novartis says that it will seek to negotiate a customary merger agreement with the independent directors of Chiron’s Board of Directors that would be subject to approval by a majority of the Chiron shares not owned by Novartis.