This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ImClone Soars on Buyout Bid (Update)

Updated from 12:14 p.m. EDT

ImClone (IMCL) investors have indicated -- via a 40% stock rally -- that they expect more than the $60 Bristol-Myers Squibb (BMY - Get Report) offered for their shares Thursday.

The all-cash bid from Bristol-Myers, a 17% shareholder in ImClone, represents a 29% premium over ImClone's closing price Wednesday. It's important to remember, however, that activist investor Carl Icahn, who serves as chairman of ImClone's board, has a history of fighting for a premium price with his investments.

Icahn reportedly snubbed offers for ImClone in the $50/share range in the summer of 2006, amid rumors that he would take no less than $70 a share. That was prior to ImClone's promising Erbitux data in non-small cell lung cancer, and now ImClone has five midstage prospects in its pipeline.

Icahn -- who had been a shareholder and board member at MedImmune -- helped jimmy the sale of that biotech company to AstraZeneca (AZN - Get Report) for more than $15 billion, and a per-share price that represented a 53% premium to the closing price of MedImmune's shares the day prior.

Bristol's bid for ImClone also represents a 39% premium to ImClone's 30-day average price.

"My first reaction was that it would be about 10% higher, or a 50% premium from their 30-day average," said Carol Werther, biotech analyst for Summer Street research who recently upgraded ImClone stock to buy. The 50% premium would be roughly $67 a share. But it's difficult to peg value of ImClone's midstage pipeline, she says. The low price being the $60 bid, Werther says, the high price might be $75.

Narrowing that down a bit more, Stanford Group Co. analyst Han Li says a potential acquisition price might be $65 to $70 a share based on recent biotech M&A premiums.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NVS $76.07 -1.00%
PFE $33.71 2.80%
IMCL $0.13 -3.95%
BMY $71.14 -1.10%
AZN $28.91 -1.30%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,064.06 -17.37 -0.83%
NASDAQ 4,765.7860 -51.8080 -1.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs