Predictions on Imclone's Suitors

 |  Includes: BMY, IMCL
by: Derek Lowe

So it seems that Bristol-Myers Squibb (NYSE:BMY) took my advice (yeah, sure) and made an insultingly incremental counteroffer for Imclone (IMCL) , raising their $60/share all the way to. . .$62. I was hoping for something more like $60.25 myself, but you can’t have everything (I should send them a bill for consulting services and see how far that gets me).

Carl Icahn has replied in yet another public letter, saying that there must be more productive ways for BMS to enrich its lawyers. I notice that the folks at the Wall Street Journal’s Health Blog are getting tired of the extended correspondence between Icahn and BMS’s Jim Cornelius. Although I’m still enjoying the show, I can see where it will eventually pall.

Icahn claims that his mystery $70/share bidder is doing due diligence, which should be completed this weekend. You’d think that any due diligence worth the name would tell someone not to pay $70/share for Imclone while Erbitux is still tied up with Bristol-Myers Squibb and its successor’s status is still very much in doubt. Wouldn’t you? Just how long does it take to run those numbers, anyway? Especially in this financial market, with credit tightening and the investment banking community in chaos? Or is the whole thing just a load of. . .no, no, Carl Icahn wouldn’t stoop to tactics like that. And I am Marie of Rumania.

My prediction: 64% chance that the companies agree, with much face-saving theater, at a price of about $65 per share. 35% chance that the whole business falls apart for now, due to the uncertainly about IMC-11F8. And that leftover 1% chance is that there really is a $70/share bidder.