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

To: Zeuspaul who wrote (15961)	2/27/1998 6:56:00 AM
From: Henry Niman	Respond to of 32384

Speaking of "affairs", I just heard on CNBC that GLX was making a hostile bid for SBH!

To: Zeuspaul who wrote (15961)	2/27/1998 7:03:00 AM
From: Henry Niman	Respond to of 32384

CNBC just expanded on the hostile takover rumor. Analysts discount the rumor (in interviews at earlier dates, several analysts indicated that a big pharma merger required a desire to get the deal done on both sides). So far the market response to the rumor has been mixed. SBH is up 4% and Amersham is up 1%, but GLX and ZEN are down.

To: Zeuspaul who wrote (15961)	2/27/1998 7:12:00 AM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

Here's what FT had to say: Hostile bid?: Investors believe further action likely from Glaxo FRIDAY FEBRUARY 27 1998 By Daniel Green Could Glaxo Wellcome launch a hostile bid for SmithKline Beecham? If Glaxo went ahead, it would have to offer about œ50bn ($83.5bn), making it the biggest takeover bid in history. But three days after their proposed friendly merger collapsed, some analysts are arguing that Glaxo must have considered this option. The resilience of both companies' shares since the merger was called off suggests investors believe further corporate action is likely. SmithKline's shares closed yesterday at 748p, almost 100p below their peak this month but above the level in January when it was in merger talks with US company American Home Products. That deal was abandoned when Glaxo approached SmithKline with its merger offer. Glaxo shares have now recouped almost half the loss incurred on Tuesday when the deal was abandoned. Glaxo is not commenting but analysts cite several arguments why it could be considering a hostile bid. Sir Richard Sykes, Glaxo chairman, has been here before. His successful hostile bid for Wellcome was launched after a friendly overture was rebuffed. SmithKline would be likely to find it difficult, as Wellcome did, to attract a white knight. A rival bidder would be bidding against the world's biggest pharmaceuticals group. Jan Leschly, SmithKline chief executive, has little room for manoeuvre. Having agreed to marry two partners within four weeks, he can hardly stress the merits of independence. Glaxo could recoup perhaps œ5bn by selling SmithKline's consumer brands such as Lucozade, Panadol and Nicorette, its clinical laboratories and DPS, the drugs distributor. SmithKline has admitted it needs cash to exploit fully its genetics research before others catch up. One alternative is to raise money from the markets, but shareholders might be less sympathetic to a rights issue - which normally depresses a share price - than a bid. One UK-based analyst said yesterday: "Ordinarily the numbers would be too big, but there are a lot of SmithKline shareholders who have seen the honey near 900p a share." Analysts at Lehman Brothers suggest an all-share offer at 900p could begin to improve Glaxo's earnings per share within three years, or sooner with a cash component. A hostile bid would also address Glaxo's difficulty with the merger of equals previously planned: it is the bigger company and wanted that reflected in management control of the combined business. The main obstacle for Glaxo would be how to justify writing off œ45bn in goodwill, according to Lehman estimates. The personal rivalries that scuppered the first deal would still exist but with Glaxo in charge arguments could be resolved more ruthlessly.

To: Zeuspaul who wrote (15961)	2/27/1998 8:00:00 AM
From: tonyt	Read Replies (2) \| Respond to of 32384

Just proves, one more time, what someone chooses to call themselves or put in their 'profile' (i.e. email address), should not add any weight to their posts (some folks think this is dd). Some of our 'threadsters' find it suspect when a profile is 'empty', maybe we should be suspect when it sounds too official.

To: Zeuspaul who wrote (15961)	2/27/1998 8:32:00 AM
From: Henry Niman	Respond to of 32384

Of course it's much easier to check the more "official" information than those that put up nothing (but there are ways to check out the "anonymous" posters also).

To: Zeuspaul who wrote (15961)	2/27/1998 8:39:00 AM
From: Henry Niman	Respond to of 32384

Here's what Dow Jones had to say about renewed takeover (hostile) speculation: Dow Jones Newswires -- February 27, 1998 SmithKline Beecham Shrs Climb On Glaxo Takeover Speculation LONDON (Dow Jones)--Shares in SmithKline Beecham PLC (SBH) edged higher Friday on speculation that Glaxo Wellcome PLC (GLX) might launch a hostile bid for the drugs company, having failed to strike a merger deal earlier this week. The possibility of a Glaxo bid was mooted by analysts immediately after the merger talks ended late Monday, but many discounted it because of the cost and likely opposition from SmithKline. Fresh media speculation Friday, however, appear to have fueled market excitement once again. Around 0900 GMT, shares in SmithKline were up 14 pence, or 1.9%, to 762 pence, while Glaxo shares are down 4 pence to 1753 pence. Shares in fellow drugs company Zeneca Group PLC have climbed 36 pence, or 1.4%, to 2690 pence. A takeover bid would be a costly affair. If an offer were made around 900 pence a share, a price many see as fair, Glaxo would have to come up with a record-breaking GBP50 billion. And even then success couldn't be assured, especially if SmithKline tried to force a bidding war. On the other hand, analysts agree that events in the past month have made it painfully obvious that the drugs sector is formally in play and anything is possible. 'We're not discounting a bid. In fact the (SmithKline) share price at the moment is saying that the market wants a bid,' said one analyst at a U.S. brokerage. James Culverwell, an analyst at Merrill Lynch, agrees a takeover isn't out of the question. But he points out that SmithKline only has around GBP5.00 billion in assets, leaving Glaxo to amortize huge amounts of goodwill - possibly as much as GBP2.50 billion a year. That could make it hard, he says, to convince Glaxo shareholders that a takeover is in their best interests. Lehman Brothers analyst Ian Smith says a lot depends on Glaxo's accounting practices. If the goodwill was amortized over a long period and only amounted to around 10% of total earnings, then analysts would probably study the company on a pre-amortization basis. That would change, however, if goodwill started cutting into earnings by 25%-35%. Despite that, Smith doubts whether Glaxo Chairman Richard Sykes would let accounting issues get in the way if he decided a takeover made sense. 'Some people feel that the restructuring of the drugs industry is far too important to be screwed up by silly accounting rules,' he said. 'I'm pretty sure Sykes wouldn't be dictated to by a bunch of accountants.' If Glaxo did launch a bid, it would round off what has been a hectic few months in the industry. It all started in January, when SmithKline confirmed market rumors that it was in merger talks with American Home Products Corp. The likely cost savings generated by such a merger sparked a sharp rally in SmithKline and American Home Products shares. Other pharmaceutical stocks around the world also soared as investors prepared for a rash of takeover activity in the sector. Just two weeks later, however, SmithKline abruptly called off its talks and announced plans instead to team up with Glaxo in a marriage that would create the world's largest drugs company. The companies gave no hint of impending problems. In their respective full year profit results just last week, Glaxo and SmithKline were effusive in their praise for each other's products and vowed an announcement on the merger would come in early March. In fact it came earlier than that, with SmithKline and Glaxo stunning the market late Monday with news that the talks were off. Around 1040 GMT, shares in SmithKline have continued their early ascent, trading at 777 pence, up 29 pence. Glaxo was down 7 pence at 1750 pence and Zeneca was up 3 pence at 2657 pence. -By Erik Portanger, 44-171-832-8166, eportanger@ap.org

To: Zeuspaul who wrote (15961)	2/27/1998 9:03:00 AM
From: Henry Niman	Respond to of 32384

Here's what Reuters had to say: Friday February 27, 3:42 am Eastern Time SmithKline gains on talk of hostile Glaxo bid LONDON, Feb 27 (Reuters) - Shares in SmithKline Beecham Plc (quote from Yahoo! UK & Ireland: SB.L) rose in early Friday trade as newspaper reports revived speculation that Glaxo Wellcome Plc(quote from Yahoo! UK & Ireland: GLXO.L) is considering a hostile bid after their merger plans fell apart earlier this week. SmithKline shares trarded 12p higher at 760 by 0830 GMT. Glaxo traded 8p higher at 17.65 pounds. The Independent newspaper said Glaxo was considering a hostile bid for SmithKline, in a move designed to offer shareholders the chance to realise the huge potential value the original deal would have created. It said Glaxo was planning to sound out some of its largest institutional shareholders, in an effort to recruit their support for the deal. Separately, a report in the Financial Times said some analysts also believe Glaxo had considered the option of a hostile bid, and argued that the resilience of the two company's shares in the face of the merger's collapse suggested a belief that further activity was likely. No-one at either company could immediately be reached for comment.

To: Zeuspaul who wrote (15961)	2/27/1998 9:06:00 AM
From: Henry Niman	Respond to of 32384

Joe Kernan just mention SBH on his "Stocks to Watch" segment. He thought that most of the reports of the potential hostile bid came from newspaper speculation (I assume FT). He also noted that a $70 Billion hostile bid would be very expensive.

To: Zeuspaul who wrote (15961)	2/27/1998 9:18:00 AM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Here's a Reuters update: Friday February 27, 7:53 am Eastern Time Hostile Glaxo bid for SB unlikely-analysts By Tony Roddam LONDON, Feb 27 (Reuters) - Pharmaceutical analysts, chastened by the shock news this week of the collapse of a planned merger between Glaxo Wellcome Plc and SmithKline Beecham Plc (quote from Yahoo! UK & Ireland: SB.L), said on Friday a hostile bid by Glaxo could never be ruled out but agreed the odds were extremely remote. British newspapers reported on Friday that Glaxo was mulling a hostile bid for SmithKline after their planned marriage fell to pieces amid bitter boardroom acrimony. Glaxo declined comment. SmithKline, whose shares rose nearly seven percent on the reports, was unavailable for comment early on Friday. Analysts, who said it was more likely the companies would now seek out other corporate relationships than drag each other kicking and screaming to the altar, warned the costs of a hostile bid would be prohibitive and weigh on earnings for years to come. In addition, they said the reported clash of boardroom personalities would make a mockery of attempts to take advantage of lower-cost merger accounting practise -- which would demand a true melding of management. On a darker note, experts pointed to market rumours suggesting Glaxo's hastily-drawn-up merger proposal could have been a spoiling tactic to prevent SmithKline getting together with American Home Products Corp (AHP - news) and leaving Glaxo trailing in the corporate league. ''I don't think a conventional hostile bid is a runner, it's so Machiavellian to get it all together. SmithKline would fight tooth and nail. It would become so expensive,'' Peter Cartwright, analyst at Williams de Broe said. A second analyst, who asked not to be named, echoed Cartwright's comments. ''I haven't deleted my merger spreadsheet yet...but you would have to create enormous amounts of goodwill. If you create all that goodwill and write it off over 20 years, then you'll depress earnings by a couple of billion a year,'' the analyst said. Under British merger accounting rules, no goodwill is created and there is no need to write if off, in contrast to a straightforward takeover deal. ''It's difficult to see in companies of this size, under British accounting, how you will make the deals look good unless you do a true merger,'' the analyst said, adding that a key point of merger accounting rules was that both parties had equal roles. A third analyst said Glaxo had little to lose from the merger collapse whereas SmithKline, which has now seen two deals slip away in as many months, was in a more urgent position. The company is seen as overdependent on two major drugs which are facing patent expiry problems. ''Glaxo has effectively scuppered the AHP option for SmithKline. Glaxo has no downside risk on this. If it succeeds, they become the biggest, If not, they're still up there with the leaders,'' the analyst said. Cartwright at Williams de Broe said the companies' shared the same shareholder base, making an informal poll of shareholders by Glaxo difficult prior to any bid moves. ''The idea of a hostile bid is a pretty long shot. Before it's really on, someone would have to poll the shareholders and see if they would wear it. Once that happens, it would start to leak and the other party would leap up and down,'' he said. He noted also that an approach could backfire and shareholders insist on SmithKline's management taking over.

To: Zeuspaul who wrote (15961)	2/27/1998 9:44:00 AM
From: Flagrante Delictu	Respond to of 32384

Zeuspaul, I appreciate your response. It reminds me that the pseudo-moralist posters are in general those who have nothing of value to contribute to our thread,but lay in wait as lurkers sucking up our information & the fruits of our efforts, and then, every so often telling us why, we who try, are unworthy. These same people seem to seek the removal from the thread of Henry Niman, who is obviously the single most valuable poster we are honored to have. I'll be happy to give the webmistress $ 75 each to buy out their membership fees so we can be rid of them. Bernie

To: Zeuspaul who wrote (15961)	3/1/1998 3:32:00 PM
From: Henry Niman	Read Replies (5) \| Respond to of 32384

Here's more on the GLX hostile takeover: March 1 1998 BUSINESS NEWS Investors cool on takeover Glaxo backs off from hostile bid Matthew Lynn GLAXO WELLCOME, the pharmaceuticals giant, is backing away from launching a œ50 billion hostile bid for its rival SmithKline Beecham after the collapse of the merger agreement between them. Glaxo has been taking soundings from leading shareholders to see if it could muster support for an all-paper offer for SmithKline on the same terms as the original merger. But investors appear reluctant to back a move that does not contain any premium for control or any cash element. No decision has been taken on whether to bid. Sir Richard Sykes, Glaxo's chairman, has let it be known to investors that he would still like to bring about a merger of the two companies. Sykes has indicated he would be willing to re-open negotiations but only if SmithKline was run by a different management team. The Glaxo camp is hinting to investors that they should put pressure on the non-executive directors at SmithKline, led by Sir Peter Walters, to replace Jan Leschly, the chief executive. The merger negotiations broke down last week after Sykes insisted he did not want Leschly to be chief executive of the merged company. Leschly then broke off the talks, although SmithKline sources insist that this was done with the full support of the board. If a different management team were installed at SmithKline, a merger could be bought about swiftly, but it is unlikely SmithKline's non-executives will want Leschly replaced as chief executive. The non-executives include John Browne, BP's chief executive, Andrew Buxton, Barclays chairman, and Sir Christopher Hogg, chairman of Reuters and Allied Domecq. Leschly has returned to America, where he is based, although he has been talking to shareholders on both sides of the Atlantic, pressing his view of what went wrong. The SmithKline camp has been accusing Sykes of arrogance and insisting on controlling the merged company himself. That, they say, was in effect reneging on the deal and led to the collapse of the merger. Although analysts believe it is highly unlikely that Sykes can get a no-premium hostile bid off the ground, they say Leschly's behaviour over the last month has left SmithKline uniquely vulnerable to a bid. In the past few weeks, SmithKline has started and then ended merger negotiations with both American Home Products and then Glaxo Wellcome. Within the industry, there is speculation that either Hoechst of Germany or America's Bristol-Myers Squibb could bid for SmithKline. The City does not believe that Leschly, who has failed after two sets of negotiations, would have credibility if he proposed another merger. Glaxo supporters say the logic of the deal remains intact despite the clash of personalities. Tony Blair was said to favour the merger because he was keen to ensure Britain does not lose its powerful world position in pharmaceuticals. Glaxo supporters argue a takeover would create the world's most powerful players in the industry. Three years ago, Glaxo made a œ9.5 billion hostile bid for Wellcome and won after failing to agree a friendly merger. Analysts say that given encouragement, Sykes would be keen to pounce. "When you have had your nose tweaked like this, it must be very tempting," said Robin Gilbert, drugs analyst at Panmure Gordon. SmithKline sources were saying this weekend that it was unlikely to attempt a reverse bid for Glaxo. Having launched a furious attack on Glaxo after the collapse of the merger talks, SmithKline is working hard to cool the hostilities between the two companies. For the companies' 100,000 staff, an independent future for the two groups would come as a relief. If SmithKline and Glaxo were to combine, about 15,000 jobs would be lost.

To: Zeuspaul who wrote (15961)	3/1/1998 3:46:00 PM
From: Henry Niman	Respond to of 32384

Looks like things are heating up with GLX & SBH: Dow Jones Newswires -- March 1, 1998 Glaxo, SmithKline Prepare For Battle As Takeover Looms LONDON (Dow Jones)--Glaxo Wellcome PLC will meet with major shareholders Monday to seek backing for a hostile, no-premium takeover bid for SmithKline Beecham PLC, according to U.K. Sunday newspapers. Meanwhile, SmithKline Beecham is also expected to meet with shareholders to present them with viable alternatives to a marriage with Glaxo. According to the Sunday Telegraph, these include a bond issue of up to GBP1.00 billion to help SmithKline boost research and development expenditures. Glaxo is widely reported to be planning a no-premium bid for SmithKline that would reduce the burden of huge goodwill writeoffs necessary if it paid a significant premium. Glaxo will argue that a premium isn't required because of the dramatic cost savings and other benefits of such a merger. The Sunday Times newspaper claims the initial reaction to such a move hasn't been positive, but it notes that SmithKline Chief Executive Jan Leschly hasn't made life easy for himself by extolling the virtues of two mergers, and then failing to pull them off, within the past month and a half. In January, SmithKline said it was in merger talks with American Home Products Corp. Barely two weeks later, however, it called off the talks and instead revealed plans to merge with Glaxo Wellcome. But these negotiations fell through last week, apparently because of a dispute over 'key management issues.' In other revelations, the Observer reported that Glaxo and SmithKline had also discussed a merger in November 1996, but these talks fell apart because Glaxo's then chief executive, Sean Lance, opposed the deal. It was this opposition that eventually led to his dismissal from Glaxo last October. In announcing their proposed merger in early February, Glaxo and SmithKline pointed to the massive research and development budget of the combined company as a driving factor behind the deal. Glaxo will be using the same argument to win shareholders over to its proposal for a scrip bid that values SmithKline shares at or even below its current GBP42 billion market value. For its part, SmithKline will unveil plans to raise up to GBP1 billion through a bond issue to speed up development of key drug products. The bond would then be serviced from the cash flows from the drugs once they hit the market, according to The Observer. Meanwhile, The Times reports that speculation also is growing that a rival bidder might emerge for SmithKline - possibly Bristol Myers Squibb of the U.S. or Germany's Hoechst.

To: Zeuspaul who wrote (15961)	3/1/1998 10:09:00 PM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

Here's more merger news: Morale: SmithKline in rallying cry after collapse of merger MONDAY MARCH 2 1998 By Daniel Green Jan Leschly, chief executive of SmithKline Beecham, the UK drugs group, plans a rallying call in Palm Springs, California, next week to his top 400 executives following the collapse of the planned merger with rival Glaxo Wellcome. The management conference was planned before merger talks with Glaxo were announced a month ago. It will now be used to send a morale- boosting message to the company's 50,000 employees. Merger talks between the two companies failed last week after Mr Leschly and Sir Richard Sykes, Glaxo's chairman, failed to agree on the balance of power at the top of the merged company. The two had previously agreed to share power evenly, although Glaxo is about half as big again as SmithKline. But on February 20, Sir Richard said he should run the merged company with Jean-Pierre Garnier, SmithKline's chief operating officer, as his number two. That would have meant Mr Leschly's immediate resignation, an option rejected by the SmithKline board. Over the next few days, Sir Richard and Mr Leschly plan to canvass institutional shareholders about the choices for their companies. Glaxo has not yet taken a decision on whether to launch a hostile bid, but SmithKline is already preparing a defence team for that eventuality. SmithKline is also considering how to revive plans to raise money to help pay for its research and development. Those plans were shelved when it began merger talks with US rival American Home Products in January. SmithKline abandoned those talks after Glaxo offered a merger. Shares in Glaxo and SmithKline are likely to move sharply this week as the market's perception of whether a bid is likely changes. Glaxo closed on Friday down 57p at 1700p and SmithKline up 12p at 760p. The Palm Springs meeting had split the companies, even as the merger planning was going ahead. Some wanted the conference postponed because many of the attendees would change - or lose - their jobs as a result of the merger.