Turns out Sanofi’s proposal to buy Swiss biotechnology company Actelion Ltd. late last year wasn’t quite as compelling as it first seemed.
Actelion, in the middle of talks to sell itself to Johnson & Johnson, received an approach in early December from another bidder, identified as Company A, that was willing to pay a higher price than J&J had then offered, according to a prospectus published Thursday by J&J for its purchase of the Swiss company. The interloper was Sanofi, people familiar with the matter said at the time.
Actelion’s board decided to consider the new offer, and Chairman Jean-Pierre Garnier informed J&J Chief Executive Officer Alex Gorsky, who said the U.S. company wasn’t willing to match Company A’s price, the filing says. Actelion and J&J announced Dec. 14 they had ended discussions.
But when Garnier and Actelion Chief Executive Officer Jean-Paul Clozel got ready to sit down with Company A on Dec. 19, they were in for a surprise: it had lowered its proposed price.
“Company A indicated that it would only be willing to proceed with a transaction on the basis of a price lower than its previously communicated offer price and on different terms, and that Company A had extensive due diligence requests with respect to Actelion and its business,” the prospectus said in describing the background to the deal that ultimately led to J&J’s agreement to buy Actelion for $30 billion.
Later that day, Actelion’s board considered the price and “the tenor and content of management’s meetings with Company A” and told Garnier to go back to J&J to restart talks. Spokesmen for Paris-based Sanofi and Actelion of Allschwil, Switzerland, declined to comment.
The revelation, tucked into the depths of the filing, helps explain one of the more surprising comebacks in recent deal-making. The rekindled talks caught off guard investors who had expected Sanofi to proceed and clinch the deal after J&J had all but given up on the target.
Actelion is the second big acquisition that Sanofi Chief Executive Officer Olivier Brandicourt has missed out on in less than a year. In August, the French company’s hostile bid for Medivation Inc. failed when the U.S. biotech agreed to sell itself to Pfizer Inc. for $14 billion.
While the interloper sent an unsolicited letter to Actelion on Dec. 21 and another letter on Jan. 20 indicating it was willing to buy the company, according to the prospectus, the Swiss biotech pursued the J&J negotiations.
The board decided the competing offers would have delivered about the same value to shareholders, but there was greater certainty that the J&J deal would be completed because the documents were nearly finished and the U.S. company had done its due diligence, according to the document. The deal with J&J was announced Jan. 26.