Onyx Pharma accepts increased bid from Amgen

Amgen (Nasdaq: AMGN), the world largest independent biotech group, said on Sunday (August 25) that the board of directors of takeover target Onyx Pharmaceuticals (Nasdaq: ONXX) has approved a transaction to be acquired for $125 per share in cash.

The amount is higher than Amgen’s original $120 a share bid, which had been rejected (The Pharma Letter July 1), but still less than investors had been expecting. The purchase price is $10.4 billion, or $9.7 billion net of estimated Onyx cash. In what is seen as relatively unusual for a buyer, Amgen’s share rose more than 8%, touching an all-time high of $114.45 in early trading on Monday, while Onyx gained less than 6%.

Following rumors of a pending bid, Onyx shares - which had been trading at less than $90 before the approach was disclosed - changed hands for more than $130 each. But when it became apparent that the auction Onyx subsequently tried to run drew less interest than the company had hoped for, the share price sagged, closing at $116.96 last Friday.