Radiation oncology firm Varian Medical Systems' planned acquisition of Sirtex Medical is now in limbo. Varian informed the Australian interventional oncology therapy provider on May 22 that it would not issue a counterproposal to a higher offer from Chinese alternative asset manager CDH Investments.
Varian initially agreed in January to purchase Sirtex for $28 Australian ($21.2 U.S.) per share in cash, representing a total purchase price of approximately $1.6 billion Australian ($1.3 billion U.S.). Earlier this month, however, Sirtex received a bid from CDH for $33.6 Australian per share ($25.5 U.S.), leading to a total price of $1.9 billion Australian ($1.44 billion U.S.). Varian has the right under the acquisition agreement to submit a counterproposal to any offers but has elected not to do so.
Varian noted that the board of directors of Sirtex is still considering the relative merits and risks of the CDH proposal, but it has not yet formed a view on these matters and continues to unanimously support and recommend the Varian offer. The company also emphasized that its proposal has been unanimously approved by both boards, has fully committed financing, and has received all necessary regulatory approvals. Furthermore, Varian said that it remains ready to complete the deal following approval by Sirtex stockholders and the satisfaction of other customary closing conditions.
In contrast, the CDH proposal involves complex financing and leaves open the prospect of shareholder approval being obtained as late as March 2019, according to Varian. Furthermore, regulatory or antitrust approvals have not been obtained yet in relation to the CDH proposal, Varian said.
