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Johnson & Johnson raising takeover offer for Actelion: source

By Pamela Barbaglia and Anjuli Davies

LONDON U.S. healthcare company Johnson & Johnson (JNJ.N) is raising its offer for Swiss biotech group Actelion (ATLN.S) in an attempt to win it over for a buyout, a source familiar with the situation said on Tuesday.

Actelion shares closed up 10 percent at 209 Swiss francs, rebounding from negative territory.

The source said Johnson & Johnson increased its offer amid reluctance by the Swiss biotechnology company to give up its independence.

An acquisition of the Swiss company would boosts J&J’s drug pipeline and diversify its prospects. J&J’s biggest product, the arthritis drug Remicade, faces cheaper competition from Pfizer Inc PFE.N.

Bloomberg News reported that Actelion had rejected an offer of 246 francs per share, which would have valued a potential deal at 25.5 billion Swiss francs ($25.15 billion).

Actelion was not immediately available for comment. A spokesman for Johnson & Johnson declined comment.

The companies had confirmed last week they were in talks about a possible transaction.

Differences between how Johnson & Johnson, the world’s biggest maker of healthcare products, and Actelion view a transaction have emerged, with Actelion seeking a new, major shareholder in a merged entity and the U.S. company favoring a deal where it would take control of the Swiss biotech, the source said.

The talks between the two companies had begun in October.

The companies had originally discussed a transaction without a big premium, with the dialogue focusing on some form of share deal or an asset swap, a nod toward Actelion Chief Executive Jean-Paul Clozel’s insistence that his company develop on its own, a second source familiar with the negotiations said.

That has unraveled, with Johnson & Johnson now focused on owning Actelion outright but being forced to offer a significant premium to convince Clozel, the source said.

Driving the price higher could prompt some other companies that would have considered bidding for Actelion to back away, the source said, adding France’s Sanofi (SASY.PA) and Switzerland’s Roche (ROG.S) could still be interested.

Clozel is French, and both he and his wife, Martine Clozel, Actelion’s chief scientific officer, worked at Roche before co-founding the company in 1997.

($1 = 1.0140 Swiss francs)

(Reporting by Pamela Barbaglia in London and John Miller in Zurich, Editing by Michael Shields)