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Biotech / Medical : SIBIA Neurosciences (SIBI)

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To: LLCF who wrote (467)8/2/1999 1:11:00 PM
From: RCMac   of 579
>>What about another bid??<<

From the PR:
"SIBIA stockholders owning approximately 33 percent of SIBIA's outstanding shares have committed to support the transaction and have entered into voting and option agreements, and SIBIA has granted Merck an option to purchase other SIBIA shares under certain conditions."

These "lock-up" options, presumably at or below the $8.50/share price, are of course designed to make it more expensive for a competing bidder. (In general, the directors as a matter of corporate law would be required to give good faith consideration to a later bidder if one emerged, and can't wholly contract away their fiduciary obligation to the shareholders to consider a better deal, but they can agree to make it more expensive for the later bidder. The law is full of fine distinctions.)

That said, the absolute numbers ($87 million) are small enough that a competing bid would probably not be impossible, just unlikely.

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