Sirtex accepts CDH acquisition offer, moves away from Varian

In the ongoing back-and-forth to acquire Sirtex Medical (ASX:SRX), it seems that Varian Medical‘s (NYSE:VAR) $1.2 billion bid just wasn’t enough. Varian said today that it heard from Sirtex that the company’s board couldn’t turn down the $1.41 billion unsolicited offer from China’s CDH Investments.

The bid from CDH Investments came in at a 20% premium on Varian’s A$28-per-share offer, prompting Sirtex to reconsider a merger that already had approval from U.S. antitrust authorities and the German Federal Cartel Office.

In May, Varian formally notified Sirtex that it did not plan to submit a counter proposal. Varian said today that Sirtex formally terminated the deal with Varian and that the company is slated to pay a reimbursement fee of A$16 million to Varian.

“Varian is very disciplined in its business development approach and we do not see value beyond the A$28 price per share we offered for Sirtex,” Varian’s president & CEO Dow Wilson said in prepared remarks. “While disappointed with this decision, Varian’s long-term strategy has not changed. We remain focused on becoming a global leader in multi-disciplinary, integrated cancer care solutions; expanding the addressable markets that Varian can impact; and growing and creating sustainable value for our company and our shareholders.”

In a statement, Sirtex’s board wrote that it ultimately decided to go with CDH’s proposal “based on the materially higher offer price and our evaluation of the associated risks.”

The latest version of the CDH proposal includes a minor amendment, Sirtex noted – according to the terms of the deal, CDH Investments and its partner, China Grand Pharmaceutical and Healthcare Holdings Ltd., will jointly acquire Sirtex.

Australia-based Sirtex’s SIR-Sphere Y-90 is designed to deliver radiation therapy to patients with liver cancers. Last year, shares in the company developer fell sharply after it posted a net loss of -A$26.9 million in 2016, compared to a profit of A$54 million the year before.

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