HUGE PREMIUM: Bristol-Myers Squibb To Buy Inhibitex For About $2.5 Bln – Update

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Biopharmaceutical firm Bristol-Myers Squibb Co. (BMY: News ) Sunday said it will acquire hepatitis C drug developer Inhibitex Inc. (INHX: News ) for $26.00 per share in cash pursuant to a cash tender offer and second step merger. The boards of directors of both companies have approved the deal, valued at about $2.5 billion. The lead HCV asset of Inhibitex is INX-189, an oral nucleotide polymerase or NS5B inhibitor in Phase II development that has exhibited potent antiviral activity.

The acquisition is expected to be dilutive to Bristol-Myers Squibb’s earnings through 2016, with an expected impact on earnings per share of about $0.04 in 2012 and around $0.05 in 2013. Inhibitex’s board agreed to recommend that its shareholders tender their shares in the offer. In addition, shareholders with beneficial ownership of about 17% of Inhibitex’s common stock reached agreements with Bristol-Myers to support the transaction and to tender their shares in the tender offer.

Also, the deal provides for both the parties to effect a merger to be completed following the tender offer closure, which would result in all shares not tendered in the tender offer being converted into the right to receive $26.00 per share cash, Bristol-Myers added.

Lamberto Andreotti, chief executive, Bristol-Myers Squibb stated, “The acquisition of Inhibitex builds on Bristol-Myers Squibb’s long history of discovering, developing and delivering innovative new medicines in virology and enriches our portfolio of investigational medicines for hepatitis C.” Commenting on the transaction, Russell Plumb, President and Chief Executive of Inhibitex said, “Bristol-Myers Squibb’s expertise in antiviral drug development, and its existing complementary portfolio, will assure that the potential of INX-189 is realized as part of future oral combination therapies for millions of patients in need around the world.”

The companies anticipate that the tender offer would close around 30 days after commencement of the tender offer. Citi is serving as financial advisor to Bristol-Myers Squibb in relation with the purchase and Kirkland & Ellis LLP is its legal advisor.

BMY ended Friday’s trading session at $34.22 on a volume of 7.91 million shares on the NYSE, while INHX closed at $9.87 on a volume of 2.99 million shares on the Nasdaq.