Publish date:

Chiron Rejects Novartis Buyout Bid

Swiss drug giant Novartis sought to acquire the remaining 58% of the flu-vaccine maker's shares.
Author:

Chiron's

(CHIR) - Get Report

independent directors announced Monday that they have rejected an offer from

Novartis

TST Recommends

(NVS) - Get Report

to acquire the approximately 58% of Chiron shares Novartis does not already own for $40 per Chiron share in cash.

"Over the 10 years since Novartis has been Chiron's largest stockholder, Chiron has regularly discussed with Novartis a number of strategic initiatives, including mergers, significant acquisitions and other transactions, including transactions initiated by Novartis," the Chiron directors said in a statement.

"After thorough analysis and consideration of Novartis' offer to acquire the shares of Chiron it does not already own for $40 per share in cash, the independent directors of Chiron have determined that this offer is inadequate."

Novartis holds a 42.2% stake in Chiron and had submitted a proposal last week to acquire the rest of the Emeryville, Calif., biopharmaceutical company.

Chiron shares shot up 18% to $43.15 after the $4.5 billion offer was revealed. The stock hadn't reached the $40 level since Chiron's announcement last fall that it couldn't provide the Fluvirin vaccine to the U.S. because of problems at its manufacturing plant in Liverpool, England.

TheStreet.com's

Althea Chang

looked at Novartis' move last week.