NEW YORK (TheStreet) McKesson (MCK) on Tuesday revealed it had only narrowly failed to consummate its 6.4 billion ($8.7 billion) takeover agreement with Celesio AG and was mulling other ways of linking up with the German drug distributor, which analysts predicted may soon attract a new suitor.
The San Francisco healthcare company said its 23.50 per share bid had hauled in 72.33% of Celesio's share capital, just shy of the 75% hurdle it set. A 75% shareholding in a German company allows the parent to effectively treat the business as a unit.
But the deal was quashed after New York hedge fund Elliott Management failed to throw its entire weight and roughly 23% stake behind the approach despite a last-minute, 0.50 per share sweetener. The financial investor, led by Paul Singer, had said it would tender only half its stake, which it acquired in shares and convertible bonds after McKesson had unveiled the takeover agreement in October.
"We have been talking to Celesio for some time about various alternatives," McKesson CEO John Hammergren said during a healthcare conference in San Francisco. "Clearly a joint venture would be an alternative."
Global drug distributors are scrambling to beef up after drugstore giant Walgreen Co. scooped up 45% of its U.K. counterpart Alliance Boots GmbH for $6.7 billion in 2012. The duo strengthened their cooperation with pharmaceutical distributor AmerisourceBergen Corp. in a March deal that gave them the right to buy up to 23% of the Dublin, Ohio-based distributor.
Analysts said Tuesday that the Celesio failure may prove to just be some turbulence in the ongoing consolidation.