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Cima Considers New Bid From Cephalon

Cima Labs (CIMA) agreed Friday to discuss a revised takeover offer from Cephalon (CEPH), leaving Cima's original merger partner, aaiPharma (AAII), alone at the altar.

Cima and aaiPharma announced in early August that they would merge; but they never issued merger proxies or set dates for shareholders to vote on the merger.

In early September, Cephalon made a $26-a-share cash offer for Cima, which the Eden Prairie, Minn.-based company rejected as inadequate.

Then Cephalon approached Cima again on Sept. 10, saying it was flexible in its desire and that it would be glad to discuss an offer that included a mixture of cash and stock. That was enough to sway Cima's directors to at least talk to Cephalon, which is based in West Chester, Pa.

"In its latest proposal, Cephalon indicated that it is flexible with its offer and strongly believes that it can negotiate a proposal that could result in a superior outcome for Cima's shareholders," said Steven B. Ratoff, Cima's chairman and interim chief executive, in a prepared statement.

aaiPharma, based in Wilmington, N.C., was left saying a variation of the same thing it has said every time Cephalon has stepped into the picture during the last two months.

"We view the merger of Cima and aaiPharma as providing significant strategic advantages for both companies which will create substantial shareholder value," said Dr. Philip S. Tabbiner, president and CEO of aaiPharma, in a prepared statement. "As we have stated before, we are committed to completing the transaction with Cima under the terms agreed upon."

Those terms called for Cima shareholders to receive 1.3657 shares of stock in the new company for each Cima share. When Cephalon made its first offer, the $26 a share topped the value of the merger for Cima's shareholders by $1.39 a share.

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