Varian Medical (NYSE:VAR) said today that it stands behind its initial $1.28 billion bid to acquire Sirtex Medical (ASX:SRX) in the wake of a $1.41 billion counter offer from China’s CDH Investments.
The unsolicited 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 has approval from U.S. antitrust authorities and the German Federal Cartel Office.
Varian formally notified Sirtex that it does not plan to submit a counter proposal.
“The board of directors of Sirtex is considering the relative merits and risks of the CDH Proposal compared to the Varian Scheme, including the respective offer prices, the risks and timing to completion and the potential outcomes for Sirtex shareholders if a control transaction does not complete. The board of directors of Sirtex has not yet formed a view on these matters and continues to unanimously support and recommend the Varian Scheme,” Varian said in a statement.
Sirtex faced an array of obstacles last year, including clinical trials of its resin microsphere that failed to meet primary endpoints.
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.
A “general uptick in competition for patients with liver-directed therapies and a generally tighter reimbursement environment” was partly to blame for what CEO Andrew McLean described as a “challenging” year.
