Novartis Takeover Bid Blocked
Sep. 27, 2002
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BASEL, Switzerland (AP) _ Shareholders of Slovenian pharmaceutical company Lek DD effectively blocked a takeover bid by Switzerland's Novartis AG on Friday, the Swiss pharmaceutical giant said.
Novartis said, however, it would pursue its $886 million bid to buy the generic drug maker because the company's management had reiterated its support for a friendly takeover.
On Friday, only 42 percent of voting Lek shareholders supported the abolition of voting limits, Novartis said. The shareholders maintained the restriction on voting more than 15 percent of the Lek voting stock. Novartis had made the abolition of the voting limit a prerequisite of its original bid.
The Swiss company said later Friday that the voting restriction would become invalid anyway in a change of Slovenian law taking effect next June 30.
When it made the offer last month Novartis said it would pay around $886 million in cash. The offer is more than 73 percent above the average closing price of the shares from the beginning of 2002.
Novartis returned to this original offer Friday, after raising it 3.16 percent a share the previous day on condition that the major shareholders support the takeover bid.
The Swiss company said it would publish its offer Saturday to allow all Lek shareholders to make a decision, the Swiss company said.
``We carefully considered the interest of Lek's shareholders, employees and management, and believe the offer is full and fair both for shareholders and the company,'' said Christian Seiwald, head of Novartis Generics.
The latest bid is conditional on Novartis receiving acceptance for at least 51 percent of Lek's share capital.