In a letter send Monday to Carl Icahn, the Chairman of ImClone Systems (IMCL), Bristol-Myers Squibb (BMY) announced that after consulting with external financial advisors, the company has concluded that its initial $60 per share all cash offer made two months ago for ImClone was inadequate. Therefore, it has decided to increase its initial offer for the biopharmaceutical company to $62 per share in cash, at an offer valued at approximately $4.7 billion.
Bristol-Myers in its letter however, points out that there has not been any meaningful dialogue regarding their initial proposal. They note that the non-responsive attitude of ImClone toward Bristol-Meyers’ initial offer combined with ImClone’s lack of transparency, particularly in light of the current extraordinary market conditions, has created a protracted period of uncertainty among IMCL stockholders and other constituents which could hurt the intrinsic value of ImClone’s assets.
Bristol-Myers also states in the letter the co ‘s intentions to initiate a tender offer for all the outstanding shares of ImClone common stock that Bristol-Myers does not already own for $62.00 per share in cash, (BMY currently owns 16.6% of all outstanding shares of IMCL). According to BMY, its offer represents an approx. 48% premium to the average share price of the company’s common stock during the three-month period ended on July 30th, thus allowing IMCL’s stockholders to realize immediate liquidity on their investment at a substantial premium.
Bristol Myers in its direct letter to Icahn also said that it plans to remove all existing members of ImClone’s board of directors and replace them with five highly qualified nominees proposed by Bristol-Myers. BMY’s premise on the measure is that it wants to make sure that ImClone’s board of directors does not prevent the ImClone stockholders from having a direct voice in the process by refusing to satisfy the conditions of their offer.
On September 10, 2008, an undisclosed company and CEO offered to take over ImClone for $70 a share.