CV Therapeutics could open door to higher bid; CF Industries considers options after Terra says no

By Cristal Cody

New York, Jan. 28 - CV Therapeutics Inc. said Wednesday that its board will review its options after Astellas Pharma Inc. went public with a hostile takeover bid of $16.00 a share.

"My guess is management will again reject this offer but also open the door to a higher bid," Eric Schmidt, an analyst with Cowen and Co., said in an interview with Prospect News.

Moving to another hostile takeover attempt, Terra Industries Inc. said Wednesday that its board rejected the $2.1 billion offer from CF Industries Holdings Inc.

Meanwhile on Wednesday, financial stocks rallied over possible help from President Obama.

The Dow Jones Industrial Average rose 200.72 points, or 2.46%, to close at 8,35.45.

The S&P 500 index added 28.38 points, or 3.36%, to finish at 874.09, while the Nasdaq Composite index rose 53.44 points, or 3.55%, to 1,558.34.

CV mulls options

Palo Alto, Calif.-based CV Therapeutics said Wednesday that it extended its shareholder rights plan to Feb. 1, 2010 from Feb. 1.

Tokyo-based Astellas first made the offer in November, which the company rejected. The offer is a 41% premium to CV Therapeutics' closing share price on Monday.

CV Therapeutics said it concluded that the offer is not in the best interests of the company and stockholders.

"Astellas going public with this deal knows $16.00 isn't going to be enough to get the transaction done and they will likely raise the bid," Schmidt said. "Astellas has plenty of cash."

Schmidt estimates a fair bid of up to the low-$20.00s per share.

"At that price level, it becomes more difficult for the board to reject the bid," he said.

Shares of CV Therapeutics closed on Wednesday at $14.84, down 58 cents, or 3.76%. The stock has traded from $5.41 to $16.68 over the past year.

Terra turns down offer

Deerfield, Ill.-based CF Industries made its all-stock offer for Terra Industries on Jan. 15.

Under the proposal, Terra Industries shareholders would have received 0.4235 of a CF Industries share for each Terra Industries share. The offer represented a 22.8% premium over Terra Industries' closing stock price of $16.29 a day earlier.

Terra Industries' board said the bid is not in the best interests of the Sioux City, Iowa-based company or its shareholders.

CF Industries said in a statement Wednesday that it remains committed to the proposal to create a leading global fertilizer company with Terra Industries and will consider its options.

"Our offer, which is not subject to any financing condition, has been very positively received by the market," Stephen R. Wilson, chairman, president and chief executive officer of CF Industries, said in the statement.

CF Industries' takeover attempt also has been met with planned Senate committee reviews, and analysts have said the deal faces regulatory scrutiny.

Shares of Terra Industries rose $1.21, or 6.21%, to $20.69 on Wednesday.

CF Industries' stock gained $2.83, or 6.11%, to close at $49.14.

Mentioned in this article:

Astellas Pharma Inc. Pink Sheets: ALPMY

CF Industries Holdings Inc. NYSE: CF

CV Therapeutics Inc. Nasdaq: CVTX

Terra Industries Inc. NYSE: TRA

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