Astellas' $3.5-billion takeover offer rejected by OSI

Astellas' $3.5-billion unsolicited takeover bid for OSI Pharmaceuticals was "unanimously rejected" by the US company's board of directors, OSI announced Monday. In addition, a group of OSI shareholders filed a lawsuit seeking to prevent OSI's board from blocking Astellas' takeover, according to court documents.

The shareholders' litigation, filed in Delaware's Chancery Court, asks the court to prevent "individual defendants from taking any further action designed to frustrate any potential transaction that would maximise shareholder value, including the Astellas proposal or an open auction." The lawsuit also requests that the court grant class-action status on behalf of all OSI shareholders.

Regarding the rejection of Astellas' bid by OSI's board, OSI board chairman Robert Ingram explained that the Japanese drugmaker's $52-per-share offer for all outstanding common stock in the company "does not fully reflect OSI's fundamental, intrinsic value." The directors recommended that shareholders reject the bid. Astellas began its tender offer to OSI's shareholders on March 2 after OSI could not be persuaded to enter into buyout discussions with Astellas.

Astellas stated that it "continues to firmly believe in its proposed transaction." However, Cowen & Co. analyst Eric Schmidt previously indicated that "we anticipate Astellas will modestly sweeten its offer in order to complete the transaction on friendly terms."

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