MoFo's Braun Advises Astellas in $4B Acquisition


Posted on May 26, 2010 at 9:05 PM

Morrison & Foerster, led by partner Michael Braun, advised Astellas Pharma Inc, which has become Japan's second-largest drugmaker, in an acquisition of Melville, NY-based biotech OSI Pharmaceuticals, Inc. for $57.50 a share in cash, or roughly $4 billion. OSI was advised by a group of lawyers at Skadden, Arps, Slate, Meagher & Flom.

The two companies' announcement came about two months after Astellas launched a hostile takeover bid for OSI, offering about $3.5 billion in total, which OSI held undervalued the company. Astellas' lawyers filed suit in an effort to force OSI directors to negotiate, and at the end of March the two parties agreed on an 11 percent increase on the preliminary offer, which represents a 55 percent premium to OSI's last closing price before Astellas launched the hostile bid. Astellas will now add OSI's best-seller cancer drug Tarceva to its line-up, which will help strengthen its cancer drug business during a decline in earnings in its core, transplant and urinary therapeutic areas.

During the deal announcement, Masafumi Nogimori, president and chief executive of Astellas, said that the merger will provide his company with a top-tier oncology platform in the US and an expanded product portfolio and pipelines. OSI chief executive Colin Goddard voiced his belief that the acquisition both recognized the significant value his company has built for their shareholders and provided the merged companies with an opportunity to create a "stronger collective path forward." Astellas predicts that the deal will add 34 billion yen in revenue in the year to March 2011, and predicts that OSI earnings will grow in the years ahead to contribute an operating profit by March 2015.

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