CSL Finally Confirms $A16 Billion Vifor Deal

CSL has struck a deal to buy Swiss-based Vifor Pharma Ltd for $A16.4 billion, its biggest deal since listing in 1994.

CSL’s announcement on Tuesday evening came after the company asked for trading in its shares to be suspended before trading started earlier in the day.

The company revealed it would be making a major announcement by Thursday. The company expects to wrap the placement up on Wednesday.

In its Tuesday evening statement, CSL said it would make an all-cash public tender offer of $US179.25 for each Vifor Pharma share, payable in U.S. dollars, representing an aggregate equity value for Vifor Pharma of $US11.7 billion or $A16.4 billion,

Vifor is a global specialty pharmaceutical company with leadership in Renal Disease and Iron Deficiency.

CSL said the deal “Expands CSL’s leadership across an attractive portfolio focused on Renal Disease and Iron Deficiency” and “ omplements CSL’s existing therapeutic focus areas including Haematology, Thrombosis, Cardiovascular, and Transplant and high quality pipeline.”

“The transaction… further advances CSL’s 2030 strategy to create value by adding a high growth, cash generative and sustainable business which complements and expands the global leadership positions of CSL Behring and Seqirus,”CSL said in its announcement to the ASX.

CSL said in its statement that the deal has the support of the Vifor board and the company’s biggest shareholder, Patinex AG which owns 23.2% of Vifor Pharma which has agreed to tender its shares.

CSL says the offer has an 80% minimum acceptance condition.

To pay for it CSL says the total cost of the $US12.3 billion ($A17.2 billion) cash offer will be funded through a $US4.5 billion ($A6.3 billion) fully underwritten placement to big investors, $US6 billion ($US8.4 billion) of new debt and existing cash (CSL had $US1.8 billion of cash on hand at June 30 this year).

The Placement price will be determined via a book build process commencing at $A273.00 a share, representing a 8.2% discount to the last closing price of $A297.27 on December 13.

The Placement will result in approximately 23.1 million Placement Shares, representing 5.1% of CSL’s ordinary shares on issue.

As well CSL says it will also undertake a non-underwritten Share Purchase Plan for eligible shareholders in Australia and New Zealand. The SPP is targeting to raise up to $A750 million ($US534 million).

CSL also confirmed its 2021-22 net after tax profit guidance of around $US2.150 billion – $2.250 billion


Meanwhile shares in IVF operator Virtus Health (ASX: VRT) leapt more than 35% yesterday after the company confirmed private equity firm BGH has made a $607 million takeover offer for the business.

The company has told the ASX that BGH is offering to buy 100% of issued capital at $7.10 per share. The stock closed at $5.21 on Monday and $7.01 yesterday, which indicates investors are believe the deal will be happen.

The Virtus board says it is currently reviewing the offer, telling shareholders they do not need to take any action.

Virtus operates fertility clinics across Australia, Singapore and Ireland.

It has had a tough two years in the face of Covid pandemic restrictions, and shares are down 4.9% year-to-date.


Finally, Mesoblast (ASX: MSB) shares plunged more than 20% after emerging from a trading halt with the news that its high-profile deal with a global pharma giant had fallen over.

The deal had gained a lot of attention being that it involved mesoblast’s Covid-19 treatment, remestemcel-L for patients with acute respiratory distress syndrome (ARDS) due to COVID- 19.

The shares fell 21.5% after the company confirmed biotech giant Novartis was walking away from a planned investment and commercialisation deal that Mesoblast had claimed could be worth $US505 million.

Shares in the company fell to 20-month low of $1.335 just. They later rebounded a touch to be down 17.35% at the close at $1.405.

Mesoblast first announced the partnership last November, which was set to include a $US50 million payment from Novartis, including a $25 million equity injection.

The company had told investors it could end up eligible for $US500 million in pre-commercialisation milestones should the deal go ahead.

The two companies were set to commercialise Mesoblast’s COVID-19 treatment, which was then in clinical trials.

However, the deal was thrown into some doubt after Mesoblast’s phase 3 trial for the treatment was cut short last year, and both companies had kept silent on the status of the deal since then, saying it was subject to closing conditions.

On Tuesday Mesoblast told the market it “was notified today by Novartis that it has chosen to terminate the agreement with Mesoblast prior to closing”.

“Mesoblast remains highly focused on executing on our short-term objective to bring remestemcel-L to market for patients with acute respiratory distress syndrome (ARDS) due to COVID-19,” the company said.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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