SAN FRANCISCO (**) -- Bristol-Myers Squibb Co. has offered to purchase the shares of ImClone that it does not already own for a total of $4.5 billion, or $60 each.
The offer price represents a 29% premium to ImClone's closing price Wednesday of $46.44. But shares of Imclone jumped more than 38% in early morning trading to $64.22 -- signaling the market believes a higher offer may be in the works.
New York-based pharmaceuticals manufacturer Bristol-Myers
(BMY:
Bristol-Myers Squibb Company
Last: 21.21-0.30-1.39%
10:
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BMY 21.21, -0.30, -1.4%) has owned about 17% of Imclone since September 2001. The companies are partners in the production and sale of Erbitux, a drug designed to treat colorectal cancer and head and neck cancer.
In a letter to Carl Icahn, the billionaire investor activist who is chairman of ImClone
(IMCL:
ImClone Systems Inc
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IMCL 64.11, +17.67, +38.1%) , Bristol-Myers called the proposed transaction "a natural fit for both companies" and touted its ability to further develop other drugs in ImClone's pipeline.
"For nearly seven years, BMS and ImClone have worked in concert to bring Erbitux to patients and build a strong product," Bristol-Myers' Chairman and CEO James Cornelius, wrote in the letter. "We have high regard for the potential of ImClone's pipeline assets, while recognizing the early stage of their development and the significant investment which is required to further their development."
Icahn has previously agitated for a sale of the company, which put itself on the block in 2006 but found no buyers. Bristol-Myers said in its letter that it believes its offer is "full and fair." ImClone has not yet responded to the offer.
Shares of ImClone have not traded above the $60 mark since July 2004. The company is headquartered in New York and ended last year with 1,128 employees and more than $590 million in sales.
In its letter, Bristol-Myers said its offer is not contingent on any financing or due diligence. The company offered to meet with ImClone and expressed confidence that it could wrap up a deal "very quickly."
Christopher Hinton is a reporter for ** based in New York.
Dan Gallagher is **'s technology editor, based in San Francisco.