Biogen Idec Considers Takeover, Shares Surge

Biogen Idec late Friday hung the "for sale" sign, authorizing management to evaluate a possible buyout of the company, including a sale to investor Carl Icahn, one of several parties from whom it said it had received an expression of interest. Despite reiterating that it believed its current strategy was "working and generating strong operating and financial performance," it said it also will determine whether potential interest from major pharmaceutical companies "might result in superior value in the current environment." Shares of the biotech giant surged 18% AH to $81.60 on the news, capping a 3.4% climb in the regular trading session, bringing the company's market cap to about $23.5B. People familiar with the matter say Icahn, who owns about 1% of Biogen, has been negotiating with Biogen for weeks and has offered at least $23B. Icahn told the Wall Street Journal, however, he believed the company would "do better with a synergistic buyer" such as a major drug maker. One analyst said a multiple similar to that received in the MedImmune/AstraZeneca deal earlier this year would mean a takeout price of about $200/share for Biogen, but didn't believe it would get that much. The Company retained Goldman Sachs and Merrill Lynch as financial advisers to assist in the process.

Sources: Press release, Wall Street Journal, Reuters
Commentary: Is Biogen Idec Icahn's Next Activist Target? • Is Biotech on the Verge of a Breakout?
Stocks to watch: BIIB, GS, MER. Competitors: AMGN, DNA, GENZ. ETFs: IBB, BBH, PBE
Earnings call transcript: Biogen Idec Q2 2007

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