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

To: Henry Niman who wrote (16149)	3/2/1998 6:18:00 AM
From: Henry Niman	Respond to of 32384

Here's more takeover news: Drug rivals put their case to shareholders By Margaret Doyle MAJOR shareholders in SmithKline Beecham and Glaxo Wellcome are being wooed by the pharmaceuticals rivals this week in the wake of last week's acrimonious breakdown of their œ100 billion-plus merger negotiations. Jan Leschly, chief executive of SmithKline Beecham, defending his position, put the blame for the breakdown of merger negotiations on Glaxo's shoulders. Yesterday SmithKline sources claimed that Sir Richard Sykes, Glaxo's chairman, had requested that Mr Leschly or his right-hand man, Jean-Pierre Garnier, relinquish their positions to allow the merger to go ahead. The SmithKline camp now fears that Sir Richard is trying to get institutional shareholders to force Mr Leschly to quit or mount an aggressive bid. One source said: "Sykes is trying to put pressure on Jan to go, just as he did privately. It makes people wonder about his own corporate governance." Mr Leschly and Mr Garnier, who SmithKline say had been agreed as chief operating officer, are understood to have rejected the request immediately. A source close to SmithKline Beecham said: "At the time the merger was agreed, the plan allocated the jobs on the basis of merit. When Sykes tried to rework the deal, it was clear that he was only interested in allocating the jobs on the basis of power. It was felt inside the SmithKline boardroom that trust between the management teams had evaporated." Sir Richard is also meeting with his top shareholders this week. A Glaxo spokesman said: "It's not for me to say what we will be saying or won't be saying." SmithKline sources also indicated yesterday that the board is to reconsider plans to issue a œ1 billion bond to fund research and development into new drugs.

To: Henry Niman who wrote (16149)	3/2/1998 6:21:00 AM
From: Henry Niman	Respond to of 32384

Here's more on the research front: SB plans œ1bn research bond By Neil Bennett SMITHKLINE Beecham, the drugs group that broke off its œ110bn merger talks with Glaxo Wellcome last week, is working on proposals for a ground-breaking bond, worth up to œ1bn, to fund its research and development costs and reduce its need for a merger. The group is dusting off plans for the bond, which its advisers first dreamt up last year, in the wake of the collapse of the talks with Glaxo. It is one of a range of options SB is now considering as it attempts to re-establish itself as a credible independent company. SB and its advisers are preparing for a possible hostile bid from Glaxo. Sir Richard Sykes, Glaxo's chairman, is still thought to be determined to pursue the chance of a link with SB. Both companies are believed to be planning to meet their main institutional shareholders in the coming weeks. These meetings were originally fixed following publication of their preliminary figures. But now both Glaxo and SB will use them to test the strength of shareholder feeling. Glaxo is keen to establish whether investors would accept a low, all-paper offer for SB or if they are keen to see SB's management shaken up to allow the deal to proceed. Under the outline of the bond scheme, SB would ring-fence a number of its pharmaceutical products which are currently undergoing clinical trials. The cash from the bond would be used to accelerate their development and registration. The bond would then be serviced from the massive cash flows from the drugs once they come onto the market. Details of the bond have yet to be worked out and would have to protect investors from the uncertainties of the industry in which only a fraction of the drugs developed ever come to market. But the cash would give SB's development arm a massive boost at a time when it has a large number of products in the pipeline. Although SB spent more than œ750m on research and development last year, the figure is lower than that spent by many of its rivals. Meanwhile, it has emerged this weekend that Glaxo's executives vetoed a proposed merger with SB more than 16 months ago but Sykes continued to negotiate a deal with Jan Leschly, SB's chief executive. Glaxo's senior management met for a weekend in November 1996 at the group's mansion in Hertfordshire to discuss the ramifications of a deal with SB. They concluded that it would be too complex and that the two companies were too different to allow them to merge easily. Despite this, Sykes and John Coombe, his finance director, continued to examine a deal in the early part of last year. It was then that Leschly first insisted that he should be chief executive of a merged company and that Jean-Pierre Garnier, his number two, should be chief operating officer. Leschly stuck to that line throughout last weekend when Sykes suddenly demanded a different management structure for the new company. Last year's deal was scuppered by Sean Lance, Glaxo's then chief executive. He wrote a two-page letter to Sykes last March detailing his opposition to a deal with SB. Lance was opposed to giving Leschly and Garnier the two key posts in the new group. Glaxo insiders say that the row between Sykes and Lance, and the latter's opposition to the SB deal was the key factor in Lance's dismissal last October. It has also emerged that Sykes demanded Leschly's resignation in their fiery exchanges as the deal broke down last weekend. This came after hours of talks in which it became clear that neither side would compromise over the management structure of the planned new group. Sykes was prompted to try to reopen talks about the management structure after discovering that his own senior executives did not support the deal he had agreed.

To: Henry Niman who wrote (16149)	3/2/1998 6:35:00 AM
From: Henry Niman	Respond to of 32384

CNBC is also reporting on a GLX hostile takeover bid. GLX is trying to get support for a $82 Billion bid. CNBC predicts and interesting week since many of the institutional shareholders of GLX also have significant shares of SBH. 400 SBH executives are also meeting in CA, as battle heats up. CNBC is also expressing skepticism on a hostile bid because of tax considerations.

To: Henry Niman who wrote (16149)	3/2/1998 7:27:00 AM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Here's the latest from Dow Jones: Dow Jones Newswires -- March 2, 1998 Glaxo, SmithKline Confirm Shareholder Meetings This Week LONDON (Dow Jones)--Glaxo Wellcome PLC (GLX) and SmithKline Beecham PLC (SBH) confirmed Monday plans to meet with major shareholders this week, fueling speculation of an impending takeover battle for Smithkline by Glaxo. While both companies sought to play down the meetings as routine, fund managers said discussions will likely center around the possibility of a scrip bid for SmithKline. Lynne Smith, a spokeswoman for SmithKline Beecham, said company executives are due to meet with shareholders later this week and wouldn't comment further. However, she slammed newspaper reports that SmithKline was planning a GBP1.00 billion bond to fund research and development as 'total speculation.' 'The figure is speculative and the timing is speculative,' she said, adding that such rumors probably stem from comments made by SmithKline Chief Executive Jan Leschly at the company's full-year profit results in February. In a media briefing after the result, Leschly said SmithKline had previously considered a range of methods to fund rising R&D costs. Martin Sutton, a spokesman for Glaxo, said the company has several meetings scheduled with major shareholders this week, with some already underway. 'These are meetings that normally take place after results announcements,' he said. 'They didn't take place earlier because we were still in merger talks.' One U.K. fund manager, who requested anonymity, said Glaxo is 'sounding out' the reaction of shareholders to a possible no-premium scrip bid for SmithKline. For its part, SmithKline is seen rounding up support for a defensive strategy that could include entering merger talks with other major drug companies in the near future. 'We'll have to wait and see exactly what they both have in mid,' he said. 'That should become clear pretty soon.' Around 1110 GMT, shares in Glaxo were down 23 pence at 1677 pence, while SmithKline shares were unchanged at 760 pence.

To: Henry Niman who wrote (16149)	3/4/1998 8:22:00 AM
From: Henry Niman	Respond to of 32384

Here's more merger news from Reuters: Sunday March 1, 11:14 am Eastern Time Confusion veils SmithKline /Glaxo next steps LONDON, March 1 (Reuters) - Conflicting media reports abounded around UK drug giants SmithKline Beecham and Glaxo Wellcome (quote from Yahoo! UK & Ireland: GLXO.L) on Sunday as speculation mounted about some sort of tie-up between the two after merger talks broke down last week. However, neither company would shed any light on the reports or their immediate plans. A report in The Observer said that a hostile takeover attempt from Glaxo was imminent, while The Sunday Times said that Glaxo was backing away from a hostile bid. The Sunday Telegraph, meanwhile, reported that SmithKline was preparing its defences against a takeover in the form of a planned one billion pound bond to fund its research and development costs alone. Both companies declined to comment on the reports, saying they amounted to nothing more than speculation. The acrimonious collapse of a planned merger between the two pharmaceutical companies shocked equity markets last week, sending both share prices plummeting. A power struggle between top executives of both companies was behind the failure of what would have been the largest marriage in corporate history, creating a company with an estimated market value of around 125 billion pounds. The story took a new turn on Friday when British newspapers reported that Glaxo was mulling a hostile bid for its rival. The Observer said that the deal was expected to be structured as a merger rather than a conventional bid to avoid Glaxo paying a premium for SmithKline shares which would involve an expensive goodwill write-off. ''SmithKline is expecting Glaxo to go hostile, possibly within a week,,'' the paper quoted a source as saying. But The Sunday Times said investors were reluctant to back a deal that did not contain any premium for control or any cash element. The paper said Glaxo chief executive Richard Sykes still favoured a merger and would be willing to reopen negotiations, but only if SmithKline was run by a different management team. SmithKline chief executive Jan Leschly's credibility has been looking shaky after this highly-publicised merger failure, particularly in the wake of aborted negotiations with American Home Products Corp (AHP - news) four weeks ago. The Sunday Telegraph said SmithKline was getting ready to launch a huge bond to reduce the need for any link-ups. Under the scheme, the company would ring-fence a number of its pharmaceutical products currently undergoing clinical trials and use the cash to accelerate their development and registration, the paper said. The bond would be serviced from the massive cash flows from the drugs once they come onto the market. The paper also said that Glaxo executives vetoed a proposed merger with SmithKline over 16 months ago yet Glaxo's Sykes continued negotiations with SmithKline Beecham's Leschly. The planned merger had been warmly welcomed by analysts as an ideal fit for both sides, creating a research and development giant with an annual budget of almost $3 billion. However, some senior industry figures had privately questioned the logic of the move, suggesting the merger was driven more by the egos of Sykes and Leschly. According to the Observer, both men are due to meet shareholders face-to-face on Monday.