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Biotech company ImClone shares rise after revelation of thwarted takeover bid

Biotech company ImClone shares rise after revelation of thwarted takeover bid

Shares of ImClone Systems Inc. soared nearly 8 percent Wednesday, a day after the biotechnology company revealed in a regulatory filing that an unspecified drug maker offered to buy it for $36 a share, a significant premium over its current price.
ImClone said it turned down the deal because it was opposed by the billionaire financier Carl Icahn, who owns 14 percent of the company.
But in the latest series of barbs exchanged between Icahn and ImClone, Icahn said in a filing Wednesday that he opposed a $35.50 a share bid by the drug company but said that he was never informed of the sweetened offer. He said if ImClone really favored the sale, it should have pursued the matter even though he thinks the company is worth more than $36 a share.
ImClone, which makes cancer drug Erbitux, and Icahn are locked in a struggle over the company's direction, and last week Icahn moved to remove half of ImClone's 12-member board. ImClone revealed the $36 bid in a filing Tuesday and also laid out its reasons why investors should reject Icahn's push.
ImClone's shares jumped $2.16, or 7.95 percent, to $29.33 in heavy trading Wednesday afternoon on the Nasdaq Stock Market. The shares have traded between $26.96 and $43.08 over the past year.
Analysts generally disagree with Icahn's assessment of ImClone, saying the company faces numerous challenges that will pressure the stock and ward off potential suitors. Since the offer was made last month, the company has lost a patent challenge to Erbitux and now the drug has competition from a product made by Amgen Inc.
Analysts also note that the ongoing dispute between Icahn and the ImClone board could lead to negative investor sentiment and potentially the loss of key employees.
Friedman Billings Ramsey & Co. analyst Jim Reddoch told investors in a note that it was unlikely that a buyer would make an offer similar to the $36 per share bid and that ImClone shares are at risk because of the new competition. He rates the stock "underperform" with a price target of $21, well below its current level.
ImClone declined to name the suitor and Icahn didn't return a call for comment.
ImClone said in a filing on Tuesday that investors should reject Icahn's efforts to oust half of its directors because he failed to support the $36 per share bid, has no strategy to boost profit and is trying to take control without paying a premium.
In his filing Wednesday, Icahn said the board's inability to accept an offer it believed was reasonable illustrates why he thinks that half of them should be removed.
"This whole episode points out that the board is either unable to make decisions even if they believe them to be in the best interest of stockholders or is currently misstating the facts solely to entrench themselves and keep themselves from being removed," Icahn said in the filing.
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On the Net:
http://www.imclone.com


Updated : 2021-03-02 01:13 GMT+08:00