Glaxo eyes cut-price Serono acquisition-sources Sun Jan 29, 2006 04:37 PM ET By Ben Hirschler, European Pharmaceuticals Correspondent LONDON, Jan 29 (Reuters) - GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research) has restarted talks to buy Europe's biggest biotech company Serono SA (SEO.VX: Quote, Profile, Research) for a lower price, after an auction for up to $15 billion failed to find buyers, people familiar with the situation said on Sunday.
Serono of Switzerland, which specializes in multiple sclerosis and infertility treatments, said in November it had received a number of bid approaches and had hired U.S. investment bank Goldman Sachs to run a sale.
But no bids were received by an auction deadline of Jan. 20, as potential buyers balked at the high cash price being demanded by Ernesto Bertarelli, the chief executive of Serono, whose family holds 62 percent of the capital.
British-based Glaxo, which is Europe's biggest drug maker but has a relatively small presence in biotechnology, declined to comment, while no one was immediately available at Serono.
The Wall Street Journal, meanwhile, reported that the Bertarelli family was working toward settling on an agreement that could be disclosed on the company's Feb. 6 earnings announcement.
Johnson & Johnson (JNJ.N: Quote, Profile, Research) , which recently lost a bid battle for Guidant Corp. (GDT.N: Quote, Profile, Research) , could also be in the running for Serono, the paper added.
Sources close to the auction process told Reuters last week that some potential bidders who failed to make firm offers by Jan. 20. were ready to continue discussions, but only if the price tag was lowered significantly.
The latest round of negotiations on a deal are likely to center on the price to be paid for the Bertarelli family's controlling shares.
Under a dual share structure once common in Switzerland, the Bertarellis hold their majority stake in part through non-tradeable registered shares, whose face value is only 40 percent of that of the bearer shares, but which have equal voting rights.
During the unsuccessful sale process late last year and earlier this month, Ernesto Bertarelli had demanded not only cash for the family's shares, but cash at a premium to the minorities, the sources said.
Other big pharmaceuticals companies, including fellow Swiss group Novartis AG (NOVN.VX: Quote, Profile, Research) , had previously been sifting through Serono's books. But recently, Novartis Chief Executive Daniel Vasella has played down reports of his interest.
Serono is best known for its multiple sclerosis drug Rebif. It also hopes to file for approval for a new multiple sclerosis pill, Mylinax, by 2008, which would give it a lead in the race for a more patient-friendly MS treatment that can be given by mouth rather than injection.
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