Let's Make A Deal
Its been over a month since Chiron/NASDAQ: CHIR said it received an offer from Novartis to acquire for $40 per share in cash approximately 58% of Chiron shares that Novartis does not already own. This move would take Novartis firmly into the vaccines business. Chiron said it would thoroughly evaluate the offer, but since then it has been quiet.
Chiron is a top-notch manufacturer of drugs, but bit off more than it could chew with all the problems at its Liverpool flu-vaccine plant. And with competitor GlaxoSmithKline making a move to acquire rival flu-vaccine maker ID Biomedical in order to become a major vaccine player, Chiron should be motivated to negotiate a price with Novartis. Meanwhile, Chiron's share price has risen about 10% above the bid price, a sign the market likes the deal that would strategically provide Novartis access to a range of vaccines, at a time when interest in vaccination is growing amid fears of a bird flu pandemic and vaccination could prevent the spread of other diseases. Chiron has additional value with two other business divisions, blood testing and biopharmaceuticals.
We anticipate there will be a deal between Chiron and Novartis.
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