In a letter send Monday to Carl Icahn, the Chairman of ImClone Systems (IMCL), Bristol-Myers Squibb (BMY) announced that after consulting with external financial advisors, the company has concluded that its initial $60 per share all cash offer made two months ago for ImClone was inadequate. Therefore, it has decided to increase its initial offer for the biopharmaceutical company to $62 per share in cash, at an offer valued at approximately $4.7 billion.
However, in its letter, Bristol-Myers pointed out that there has not been any meaningful dialogue regarding its initial proposal. The company noted that the non-responsive attitude of ImClone toward Bristol-Meyers’ initial offer combined with ImClone’s lack of transparency, particularly in light of the current extraordinary market conditions, has created a protracted period of uncertainty among IMCL stockholders and other constituents which could hurt the intrinsic value of ImClone’s assets.
Bristol-Myers also stated in the letter that the company’s intentions to initiate a tender offer for all the outstanding shares of ImClone common stock that Bristol-Myers does not already own for $62.00 per share in cash, (BMY currently owns 16.6% of all outstanding shares of IMCL). According to BMY, its offer represents an approx. 48% premium to the average share price of the company’s common stock during the three-month period ended on July 30, thus allowing IMCL’s stockholders to realize immediate liquidity on their investment at a substantial premium.
In its direct letter to Icahn, Bristol-Myers also said that it plans on removing all existing members of ImClone’s board of directors and replacing them with five highly qualified nominees proposed by Bristol-Myers. BMY’s premise on the measure is that it wants to make sure that ImClone’s board of directors does not prevent the ImClone stockholders from having a direct voice in the process by refusing to satisfy the conditions of their offer.
On September 10, 2008, an undisclosed company and CEO offered to take over ImClone for $70 a share.