Days before entering into exclusive takeover negotiations with Johnson & Johnson (NYSE:JNJ), Actelion (VTX:ATLN) was reportedly fielding an offer from Sanofi (NYSE:SNY). But the Swiss biotech eventually agreed to go with J&J’s $30 billion bid in an all-cash deal at the end of January.
Actelion accepted the U.S. healthcare giant’s offer because it provided more certainty, Reuters reported today.
The prospectus for J&J’s offer revealed that the rival bidder, previously identified as Sanofi, made a proposal that outbid J&J’s offer. But Sanofi later refused to proceed with takeover talks unless Actelion considered a lower price, the news outlet reported.
“Company A indicated that it would only be willing to proceed with a transaction on the basis of a price lower than its previously communicated offer price and on different terms,” the prospectus said.
Actelion’s board discussed the 2 offers on Jan. 23, according to Reuters, and ultimately decided that although the financial terms of the competing proposals would bring equal value to shareholders, J&J’s offer provided more certainty.
“J&J’s proposal offered significantly greater transaction certainty because the transaction documentation was nearly final and because J&J had already completed the required due diligence,” the board concluded.
The companies plan to spin off Actelion’s research and development pipeline into a new company, led by Actelion CEO Jean-Paul Clozel.
J&J’s prospectus provided details into how the new company will be financed, including a a credit facility worth $250 million and a 10-year convertible loan worth 580 million Swiss francs from J&J, as well as 420 million Swiss francs provided by Actelion.
The new company plans to list on the SIX Swiss Exchange, according to Reuters.
Analysts expected Sanofi to compete eagerly for Actelion, since it lost out on a deal to buy Medivation Inc. last year, giving competitor Pfizer (NYSE:PFE) a blockbuster prostate cancer treatment.
At the time, CEO Olivier Brandicourt said that Sanofi would be ready to “act rather swiftly” should a new opportunity for an acquisition arise.
Materials from Reuters were used in this report.