It seems like a week doesn't go by that someone doesn't make an offer to buy a big biotech. On Thursday, Bristol-Myers Squibb
Bristol-Myers Squibb already owns a 16.6% chunk of ImClone's shares and markets its cancer therapy Erbitux in the U.S. If the buyout offer is accepted, it would cost Bristol-Myers about $4.5 billion for the ImClone shares it doesn't already own -- about a 30% premium to where ImClone's stock was trading on Wednesday.
Investors don't seem to think that this is Bristol-Myers' best and final offer, though. Today, shares of ImClone were trading nearly 8% above the buyout offer, at $64 a share and change. Also, with Carl Icahn controlling ImClone's board of directors, even though he hasn't gotten his way with Yahoo!
Back in 2006, as a large ImClone shareholder, Icahn helped to thwart a $36-a-share non-cash offer for the company that came from an unidentified drugmaker. This latest, much larger offer from Bristol-Myers vindicates his position back then -- and the turnaround at ImClone since Erbitux produced positive data in lung cancer patients this year and a rival compound from Amgen
Bristol-Myers doesn't want to make the same mistake that the unidentified drugmaker made two years ago. It wrote a letter, tucked away in a Securities and Exchange Commission filing from Thursday, aimed at trying to convince Carl Icahn that its offer is fair. This "Dear Carl" letter (seen here) shows the power that Icahn, chairman of the board and a tough negotiator, will have over any sales process, so we'll have to see what Icahn has to say about whether Bristol-Myers' offer is large enough to get him to sell his shares. Stay tuned for fireworks.
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