Astex urges stockholders to tender shares into Otsuka offer

The board of directors of USA-based Astex Pharmaceuticals (Nasdaq: ASTX) issued a letter to stockholders addressing what it says are recent “mischaracterizations” of the pending $886 million acquisition of the company by Japan’s Otsuka Pharmaceutical (TYO: 4768; The Pharma Letter September 5).

The action comes following an open letter from Sarissa Capital, which owns around 5% of Astex, which argues that the proposed merger transaction significantly undervalues Astex and therefore it does not intend to tender its shares.

For its part, Astex says the Otsuka transaction is the culmination of a comprehensive process to maximize value for Astex stockholders. As part of that process, 33 pharmaceutical companies worldwide were contacted to gauge their interest in exploring a potential strategic transaction with Astex. All companies contacted were given an equal opportunity to participate in the process. Of the 33 companies contacted, only five, including Otsuka, executed non-disclosure agreements that contained customary terms, enabling them to conduct detailed due diligence on confidential information related to, amongst other things, the company's pipeline of products, financial condition and capital structure.