Biotest buys Nabi's Biologics unit; Doral shares slide; Virginia Financial, FNB shareholders OK merger

By Sheri Kasprzak

New York, Dec. 4 - Biotest Pharmaceuticals Corp. acquired the Biologics business unit from Nabi Biopharmaceuticals Tuesday in a $185 million cash transaction.

Shares of Nabi climbed more than 3% on the news.

Nabi's shareholders approved the asset sale back in November.

"They were obviously looking to unload an unprofitable unit and make a pretty good profit in the process," said one sellside trader. "Good for them."

Meanwhile, shares of Doral Financial Corp. slipped on Tuesday, losing $1.89, or 9.6%, to end the session at $17.80 (NYSE: DRL).

"When [Doral's] restructure deal was being worked on due diligence, folks wanted $500 million added to reserves," said one sellside trader.

"Bear Stearns said no. [They] want bondholders to come out 100%, take our $40 million fee, worry about it later. Advisors resigned. [It's the] only management I have ever seen that refuses to discuss terms when 90% of shares become free to trade."

In merger news, Virginia Financial Group, Inc. said its merger with FNB Corp. will close at the beginning of 2008 because shareholders from both companies will need extra time to look over proxy statements and sending those materials out now would coincide with the busy holiday season.

Shareholders from both banks agreed to the merger on Tuesday, and now the deal is set to close in the first quarter of 2008.

Nabi sells Biologics business

Moving back to Biotest's purchase of Nabi's Biologics business unit, Nabi sold the unit in a $185 million cash deal.

The news sent Nabi's stock up 10 cents, or 3.17%, on the day to end at $3.25 (Nasdaq: NABI).

Nabi will continue to have regulatory oversight and operational authority for the manufacture, marketing, sale and distribution of Nabi-HB, the company's vaccine to prevent hepatitis B, until Biotest gets the nod to sell and distribute the drug. Biotest submitted applications to the Food and Drug Administration to distribute and manufacture Nabi's products in the United States.

"We are extremely pleased with the smooth transition and successful completion of the acquisition," said Gregor Schulz, chairman of Biotest, in a news release.

"Biotest AG has now become a global player in the industry with a share in the highly attractive and growing U.S. plasma protein market. With the creation of Biotest Pharmaceuticals, Biotest AG has substantially expanded its capacity, product range and clinical development portfolio."

"This acquisition allows Biotest Pharmaceuticals to not only tap into the U.S. plasma marketplace, but also build upon our new foundation of experience - we have been extremely impressed by the quality and capacity of our new production facilities and the proven expertise of our new employee base," said Rainer Pabst, chief executive officer of Biotest, in a statement.

Leslie Hudson, Nabi's interim CEO, said in a news release that the completion of this transaction "marks a significant milestone in our strategic alternatives process."

"Nabi is now focused on building and realizing the significant value of Nabi's remaining assets including NicVax, our proprietary smoking cessation vaccine for treatment of nicotine addiction and prevention of smoking relapse, StaphVax, and our cash and PhosLo milestone and royalty opportunities."

Biotest, based in Boca Raton, Fla., develops immunology-related biopharmaceutical products.

Darden to sale Smokey Bones

In other news, shares of Darden Restaurants, Inc. fell after the restaurant operator agreed to sell its Smokey Bones Barbeque & Grill chain to Barbeque Integrated, Inc., a Sun Capital Partners, Inc. affiliate, in an $80 million transaction.

Darden's stock closed down 17 cents at $39.38 (NYSE DRI).

The deal is set to close in 45 days.

"By reaching this agreement, we continue to make progress on our strategic initiatives to even more strongly position Darden for future growth as well as maximize value to our shareholders," said Darden CEO Clarence Otis in a news release.

"The sale enables us to focus our resources on fully leveraging the long-term growth potential of our proven brands and emerging concepts."

Darden in an Orlando, Fla.-based restaurant operator.

Virginia Financial shareholders OK merger

Elsewhere, Virginia Financial Group and FNB's shareholders approved the merger of the two companies Tuesday.

The deal is set to close in the first quarter of 2008.

Shares of Virginia Financial closed down 59 cents to end at $17.15 but gained 13 cents in after-hours trading activity (Nasdaq: VFGI). FNB's stock slipped by 55 cents, or almost 2%, to close at $27.53 (Nasdaq: FNBP).

"We are very pleased that the merger has received all necessary regulatory approvals from our banking regulators, the Federal Reserve Board and the Virginia State Corporation Commission," said O. R. Barnham Jr., CEO of Virginia Financial, in a statement.

"However, we did not wish to mail our proxy materials during the holiday season, because we wanted to give our shareholders an ample opportunity to review and evaluate the materials. Therefore, while we had hoped to close the transaction prior to year-end, the timetable will extend slightly past that date.

"Now that we have authority from our banking regulators, we stand ready to obtain shareholder approvals and consummate the transaction as soon as possible."

Virginia Financial is the holding company for Planters Bank & Trust Co. of Virginia, as well as other banks in Virginia.

FNB, based in Christiansburg, Va., operates 27 bank branches and two loan offices.

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