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Investor stand-off threatens Arana takeoverAri Sharp
May 12, 2009
US PHARMACEUTICAL company Cephalon International is staring down investors in Arana Therapeutics.

It is refusing to increase its takeover offer or to extend it if less than half of all shareholders accept by the end of next week.

Cephalon is offering $1.40 cash a share with a 5¢ bonus if acceptances clear 90 per cent, valuing the Sydney-based Arana at about $318 million. The offer gives a 69 per cent premium to the company's pre-bid share price. Yesterday, shares in Arana fell 4¢ to $1.345.

In its supplementary Bidder's Statement, released yesterday, Cephalon said its offer would not be increased, and that if acceptances had not cleared 50 per cent by May 22, it would not extend the offer, due to lapse on June 1, unless required to do so by the Corporations Act.

The bid has the support of Arana's two largest shareholders, but others are concerned that the bid undervalues Arana's rheumatoid arthritis and psoriasis drug, ART621.

Acceptances have reached 38.16 per cent, but a group of shareholders who claim to have as much as 30 per cent of the company have refused to sell into the bid.

Cephalon chief executive Frank Baldino said he was "delighted" with the acceptances by 4800 shareholders. "It is now time for Arana shareholders who have not accepted the offer to do so or they risk missing out on a compelling cash offer," he said.

Bryce Whetton, a private investor from Adelaide who is one of the leaders of the push against Cephalon, said he was not influenced by the latest announcement. "We're still standing firm," he said.

Last month Acuity Technology Management, an independent expert commissioned by those shareholders, valued the company at $401.2 million to $467.4 million — the lower figure being 26 per cent higher than the Cephalon offer.