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May 24, 2010
 |  BioCentury  |  Finance

What knight?

Wall Street guessed wrong: Astellas grabs OSI for only $4B

By Stacy Lawrence Senior Writer

OSI Pharmaceuticals Inc. (NASDAQ:OSIP) isn't talking about what happened during its search for buyers, but it looks like the White Knight investors hoped for never showed. Almost two months after it rejected a publicly announced hostile bid from Astellas Pharma Inc. (Tokyo:4503), OSI's board agreed last week to an acquisition at $57.50 per share, not much better than the price Astellas proposed in private more than a year ago.

When Astellas privately approached OSI in February 2009, it proposed a takeout at $55-$57. OSI's board rejected that proposal on the grounds that it undervalued the company. Subsequently, Astellas made public a hostile bid of $52 on March 1 this year (see BioCentury, March 8).

The biotech's stock immediately overshot the offer, climbing $19.23 (52%) to $56.25. Two weeks later, OSI said its board had instructed the company to seek other offers. From March 15 until Black Thursday on May 6, the stock price traded largely in the $58-$60 range(see BioCentury, March 22).

The final bid values the biotech at $4 billion, while the company would...

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