Sirtex shares closed down nearly 3% yesterday after US cancer treatment developer Varian Medical said it will not increase its offer to buy local biotech Sirtex Medical, despite a higher Chinese offer.
Chinese private equity firm CDH Investments lobbed a $1.9 billion bid for Sirtex Medical days before Sirtex shareholders were due to vote on a lower $1.6 billion from US-listed Varian Medical Systems.
Varian said it will not give a counter-proposal. It remains committed to its offer to acquire Sirtex at $28 per share. “
Varian has formally notified Sirtex that it will not be submitting a counterproposal,” the Californian-based company said in a statement.
Sirtex’s shares ended at $29.27, down 2.7% and well above Varian’s offer price, meaning investors have dismissed its chances, but remain uncertain about CDH’s $A33.60 offer.
Sirtex, in a separate statement, said it would make a recommendation on which proposal it believed was in the best interests of shareholders after assessing the CDH offer.
The board is still recommending Varian’s offer pending a decision on the CDH offer.
“Since the announcement of the Varian scheme, Sirtex has experienced uncertainty and distraction, and this has contributed to dose sales being below expectations,” Sirtex Chief Executive Andrew McLean said.
The company’s worldwide dose sales from January to April this year fell 10.6%, and Sirtex’s second-half dose sales are expected to be relatively flat versus the first half, McLean said.
Sirtex also said it now expects its fiscal 2018 underlying earnings before interest tax and amortisation to come in at the lower end of previous guidance of $A75-$A85 million.