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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Torben Noerup Nielsen who wrote (15732)	2/23/1998 7:14:00 PM
From: tonyt	Read Replies (2) \| Respond to of 32384

With all the talk of 'merger-mania' (and posts, upon posts, upon posts from every news source by one of our 'threadsters'), I'm suprised (well, not really) that this has not been posted yet: February 23, 1998 SmithKline, Glaxo End Talks On Merger of Drug Giants An INTERACTIVE JOURNAL News Roundup SmithKline Beecham PLC and Glaxo Wellcome PLC terminated merger discussions because the companies have been unable to agree on the terms of a possible deal. SmithKline Beecham's board unanimously decided against recommending to shareholders a merger in which the company would have been the junior partner. Glaxo officials late Monday also confirmed the deal was off. On Jan. 30, SmithKline had announced it was calling off talks with American Home Products Corp. in favor of a potential deal with Glaxo, sending the stocks of both British pharmaceutical companies surging. The deal would have been the among the largest corporate mergers in history and created the biggest drug company in the world with combined sales of $27 billion. SmithKline Beecham said its board "is aware of the significance of this decision, particularly in light of the Jan. 30 public announcement [of the talks] and the substantial increase in the market capitalization of both SB and Glaxo." SmithKline Beecham said that after careful consideration, however, the board unanimously decided that it was unable to recommend the proposed merger to its shareholders. SmithKline Beecham said its board no longer believed that the merged group would be able to operate in such a way as to produce superior performance for shareholders. The companies earlier agreed that the board of the combined group would be drawn from the boards of both companies. In addition, five executive directors were named. SmithKline said that before the announcement, there had been discussions and agreement in relation to the roles of the five executive directors. Discussions reaffirming the agreed key management roles took place on a number of occasions between the parties after the announcement. SmithKline said that on Feb. 20, Glaxo indicated that it was not prepared to proceed on the agreed basis. In discussions since then, SmithKline said Glaxo "has been unwilling to proceed in accordance with the agreed arrangements." SmithKline said discussions since Feb. 20 have revealed "a number of differences between the companies," including differences in the approach to the possible merger, management philosophy and corporate culture. The company said Glaxo's recent conduct of these discussions "has inevitably strained relations between the two companies." SmithKline said its board has unanimously reached the view that "insurmountable differences" have arisen which would undermine the effective management of the merged group and impair its ability to deliver the shareholder value creation fundamental to the merger. For its part, Glaxo issued a one-sentence press release stating that "discussions on the proposed merger with SmithKline Beecham PLC have been terminated." The news came after the markets closed in New York. SmithKline American depositary receipts fell 25 cents Monday on the New York Stock Exchange to close at $66, while Glaxo American depositary receipts fell 31.25 cents to close at 62.4375. Return to top of page Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.