Pfizer Inc. (NYSE:PFE)
According to insider sources, Pfizer Inc. (NYSE:PFE) and Johnson & Johnson (NYSE:JNJ) were locked in a bidding war for Global Blood Therapeutics (NASDAQ:GBT) just days before Pfizer’s $5.4 billion offer emerged as the winner.
In a regulatory filing on Friday, it was revealed that an entity only identified as ‘Company A’ had started the process. The sources who asked not to be identified since the matter was not yet publicly said that ‘Company A’ was Johnson & Johnson.
Before being outbid at the end, the proxy statement shows that J&J had spent more than two months trying to acquire Global Blood Therapeutics against Pfizer and another interested buyer. This bidding war illustrates how despite volatile markets disrupting the broader dealmaking environment, biotechs with late-stage products have become prime takeover targets for big pharma.
J&J’s Global Blood Therapeutics takeover would have been Joaquin Duato’s first significant deal since he took over as the chief executive at the beginning of this year.
J&J and Global Blood Therapeutics’ representatives declined to comment on the matter.
On August 8 Pfizer inked the deal to buy global blood therapeutics for $68.50 per share snapping up a company whose treatment for sickle-cell disease appears to be the most promising of all therapies being developed to treat the inheritable disorder mainly affecting black people.
Global Blood Therapeutics Draws Takeover Interest
About two months earlier, J&J set the deal in motion when it proposed a $55 per share cash offer. Global Blood Therapeutics’ bankers got in touch with Pfizer later that month and approached three other potential buyers. According to the filings, two of those buyers declined to pursue the deal. This left Global Blood Therapeutics in talks with J&J, Pfizer, and another third party for weeks.
By the last week of July, J&J and Pfizer were evenly matched, having topped up their offers to $60 per share. By the end of the month, Global Blood Therapeutics requested both parties to submit their best and final bids and be prepared to execute the deal before the end of the following business week or noon New York time on August 5.
During this time, news leaked, and Bloomberg News reported on August 3 that global blood therapeutics had been the target of a takeover by several big pharma companies.
On Friday, just before the board of global blood therapeutics was scheduled to meet, both Pfizer and J&J decided to up their respective offers. Pfizer increased its bid to $67.50 and said it was ready to execute the deal immediately. On the other hand, j&j upped its price to $61.50 but requested for three days of exclusive negotiations. After Global Blood Therapeutics CEO Ted Love informed J&J that its bid was too low, the company later said it would be open to raising its offer to $65.
The board met at noon, and after discussing the offers, they decided to ask for another set of revised final offers from Pfizer and J&J.
When global blood therapeutics asked J&J to increase its bid after the meeting, the company said that $65 was the highest price they were likely to reach, while Pfizer representatives also said that $67.50 was their best and final offer.
According to the proxy filing, the board had been torn because although J&J’s agreement was more favorable to the company with regard to regulatory issues and closing conditions, Pfizer had offered a higher bid.
Later that night, things took a twist as Pfizer increased its bid to $68.50 and insisted that it was ready to execute the deal by the next day, which was a Saturday. After Pfizer and global blood therapeutics finalized the deal terms over the weekend, the merger was signed on Sunday, and the deal was announced the following Monday.
Featured Image: Megapixl @Haris2048
