San Diego medical diagnostics giant Gen-Probe declined yesterday to increase its June 3 offer for a Belgian biotechnology company after a European rival topped its $297 million bid with a higher offer.
Gen-Probe had offered 6.1 euros a share, or $9.58, to acquire 30.9 million outstanding shares of Innogenetics NV, a medical diagnostics company based in Ghent. The deal was valued at roughly $297 million without including Innogenetics' warrants and convertible bonds.
Brussels-based Solvay SA, the world's largest maker of male-hormone therapies, offered to buy Innogenetics yesterday for 6.5 euros a share, or roughly $10.23 a share. It was valued at about $316 million, apart from warrants and convertible bonds.
Solvay initially bid 5.75 euros per share, or about $9.04, in a friendly buyout offer tendered to Innogenetics on April 24.
In a statement issued before 6 a.m. yesterday in San Diego, Gen-Probe said it would not increase its bid.
Gen-Probe's offer for Innogenetics was a “full and fair offer,” said Gen-Probe chairman and chief executive Hank Nordhoff, “and a higher bid therefore does not make financial sense for us.”
The decision sent Gen-Probe's stock higher on Wall Street, as several analysts said the company made the right call. Gen-Probe rose $1 share, or 2.1 percent, to close at $49.87, in Nasdaq trading of 807,622 shares, almost 57 percent higher than the recent average volume.
The decision to back away won't stop Gen-Probe from continuing to shop for “the right strategic opportunity,” said Carl Hull, president and chief operating officer.
Whether the company bids for another European biotech or not, Hull said, “getting a foothold in Europe is a critical part of our plan for the next two to three years.”
Sales of molecular diagnostics in Europe are increasing by 24 percent a year – double the growth of the U.S. market – and Gen-Probe can get its products to market faster under European regulatory procedures than in the United States, Hull said. The European patent process also moves more quickly, he said.
Gen-Probe reported available cash of $488 million and no debt at the end of the first quarter that ended June 30. The company is expected to report its second quarter financial results July 31, said Mike Watts, a Gen-Probe spokesman.
Bruce Bigelow: (619) 293-1314; bruce.bigelow@uniontrib.com
