Merck KGaA has today agreed to sell its 21.8% stake in Schering to Bayer following legal action.
Yesterday, Bayer sued Merck for damages after the progress of its €16.5 billion friendly takeover of Schering ran into trouble.
Two days ago, Bayer claimed to have a 60.14% stake in Schering, which was around 15% short of the 75% minimum acceptance threshold.
Merck, meanwhile, had rapidly increased its stake to 21.8%, whilst refusing to comment on its intentions towards Schering.
Announcing the lawsuit, Bayer accused Merck of failing to comply with the requirements of the US capital market by increasing its stake in Schering without revealing its strategic intentions.
Dr Roland Hartwig, Bayer’s general counsel, said “the effect of Merck’s tactics has been to withhold important information from financial markets, putting Schering stockholders at a disadvantage and harming Bayer”.
The two companies have since announced an agreement, whereby Bayer has withdrawn its lawsuit and will acquire Merck’s stake at a price of €89.00 per share. This is €3.00 above the €86.00 per share of Bayer’s formal offer.
Shareholders in Schering who tendered their shares under the formal offer will benefit from the new price of €89.00 per share.
All shareholders in Schering have until 24.00 hours today to accept Bayer’s takeover offer.
Pointing out that the total value of the transaction with Bayer was €3.7 billion, Merck said it would book an extraordinary gain of about €400 million in the second quarter.
Source: OTC Bulletin
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