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   Biotech / MedicalSIBIA Neurosciences (SIBI)


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To: LLCF who wrote (459)8/2/1999 9:20:00 AM
From: Gary L. Kepler
   of 579
 
CNBC indicated $8.50 per share.

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To: Gary L. Kepler who wrote (460)8/2/1999 9:24:00 AM
From: scaram(o)uche
   of 579
 
Yeah..... well, take the profit and move on. I'm not used to working this hard for 2X, no matter how many times I've harvested it.

:-)

Can't believe all of the biotech CEOs out there let this one get away.

Stupid.

Comer et al..... congrats! Good science. Very, very strange finish..... what was the Lilly deal, a gift to them for being nice in the past? Cost your shareholders a few pennies, given this finale, no?

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To: Gary L. Kepler who wrote (460)8/2/1999 9:28:00 AM
From: LLCF
   of 579
 
Bloomberg says $8.50 a share cash as well.. tender to commence august 6th. Buying for the drug discovery capabilities... "SIBIA researchers, who are among the best in the biotech industry, have opened several avenues for potential scientific discovery, and now we can further exploit them together."

Comer makes a statement about great opportunities... wish he'd give SIBI shareholders a bit more of an opportunity in the way of a higher price!

DAK

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To: Gary L. Kepler who wrote (460)8/2/1999 9:56:00 AM
From: Gary L. Kepler
   of 579
 
Thanks Richard and DAK. Your counsel is appreciated. The tax man cometh. For the record from Bloomberg:

MERCK ACQUIRES SIBIA NEUROSCIENCES, INC., A CALIFORNIA-BASED

Biotechnology Firm; Acquisition Augments Merck's Drug Discovery Program
Business Editors

WHITEHOUSE STATION, N.J., & LA JOLLA, Calif.--(BUSINESS WIRE)-- Aug. 2, 1999--Merck & Co., Inc., (NYSE: MRK), a research-driven pharmaceutical company, and SIBIA Neurosciences, Inc., (NASDAQ: SIBI), a leading small company in the biology and chemistry of drug discovery for central nervous system disorders, today announced they have entered into a definitive agreement under which Merck will acquire SIBIA for $8.50 per share in cash.

Merck will commence a tender offer for SIBIA shares by Aug. 6. The transaction will total approximately $87 million. "Acquiring SIBIA will significantly enhance Merck's excellent basic research capability in the field of central nervous system disorders," said Bennett M. Shapiro, executive vice president of worldwide licensing and external research, Merck Research Laboratories. "SIBIA researchers, who are among the best in the biotechnology industry, have opened several avenues for potential scientific discovery, and now we can further exploit them together."

William T. Comer, Ph.D., president, chief executive officer and director of SIBIA, said: "By joining Merck, we will gain significant scientific, technological and financial support to help exploit our broad drug discovery platform and bring our basic research discoveries to the market. Merck has a rich tradition of biomedical research, and we are proud to be joining it."

Richard N. Kender, Merck vice president of corporate development, said: "In the search to discover and develop important medicines, Merck Research Laboratories relies on its strong internal capability, and complements that with external research collaborations. The acquisition of SIBIA strengthens our drug discovery research capability." "Merck already has a major CNS research facility in the United Kingdom and it has been very successful," Dr. Shapiro said. "SIBIA augments that, and gives us a presence in the CNS research community in the United States."

Upon closing of the agreement, SIBIA employees will become Merck employees. Merck intends to keep SIBIA's existing facilities in La Jolla, Calif.

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. The acquisition is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and the acquisition of a majority of SIBIA shares by Merck, as well as other customary conditions. The two companies expect to complete the acquisition in September 1999.

Founded in 1981, SIBIA is engaged in the discovery and development of novel small molecule therapeutics for the treatment of neurodegenerative, neuropsychiatric and neurological disorders. The company, which went public in 1996, is a leader in the development of proprietary drug discovery platforms and technologies.

Merck is a global, research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products, directly and through its joint ventures, and provides pharmaceutical benefit services through Merck-Medco Managed Care.

SIBIA was represented by the investment banking firm CIBC World Markets. (For more information about the companies, visit www.sibia.com and www.merck.com.)


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To: LLCF who wrote (462)8/2/1999 10:07:00 AM
From: Biomaven
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I'm upset that they didn't structure this as a tax-free reorg.

I wonder if SIBI management/owners got spooked by the trial results and grabbed what they could get right now.

Peter

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To: Biomaven who wrote (464)8/2/1999 10:35:00 AM
From: LLCF
   of 579
 
<I'm upset that they didn't structure this as a tax-free reorg.>

Me too, I'm paying regular income tax on this thing!!! Sucks. The other neuro stocks arent doing crap either... interesting.

DAK

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To: Biomaven who wrote (464)8/2/1999 10:39:00 AM
From: scaram(o)uche
   of 579
 
Strange company, Peter. I think they like the idea of advancing the science, secure on the bluffs over the beach in La Jolla, Merck sign out front. Comer has been shareholder-unfriendly to an extreme, but I hung in there assuming that the science would overcome his practice.

I can't complain. It's been a cash machine. The 5 to 7 game broke down about six months (?) ago, but.... SIBI's been paying the rent for ages. One just needs to focus on finding discounted, good science.

Hats off to the bench grunts at SIBI. You know damn well who you are.

Special appreciation to Drs. Vernier, Schneider, McDonald, Harpold and Lloyd. Class act.

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To: scaram(o)uche who wrote (461)8/2/1999 12:25:00 PM
From: LLCF
   of 579
 
<Can't believe all of the biotech CEOs out there let this one get away.>

What about another bid????

DAK

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To: LLCF who wrote (467)8/2/1999 12:33:00 PM
From: scaram(o)uche
   of 579
 
>> What about another bid? <<

Well, one could wait and hope, or one could follow PNU last week and just switch (focus, if not money) to the next no-brainer.

There are lots of interesting plays.... the OSIP patent, SNAP (undervalued and a phase II with Merck for BPH), KDUS (will Merck really care about putting a small company out of business or about protracted litigation over peanuts?)......

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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.

--RCM

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