(Bloomberg) — Bristol-Myers Squibb Co. is planning to tender its shares in Acceleron Pharma Inc. after Merck & Co. agreed to buy the biotechnology company for $11.5 billion, according to people with knowledge of the matter.
Most Read from Bloomberg
Bristol-Myers is Acceleron’s biggest shareholder with an 11.5% stake that it inherited when it bought Celgene Corp. in 2019. Selling that stake will bring Merck deal closer to completion.
Merck needs approval from a majority of Acceleron’s shareholders to close its tender offer for all of the company’s shares, among other conditions, according to a Sept. 30 statement.
Representatives for Bristol-Myers and Acceleron, based in Cambridge, Massachusetts, declined to comment.
Another Acceleron investor, Avoro Capital, which holds about 7% of Acceleron’s stock, said Sept. 30 that Merck’s deal “drastically undervalues” the biotechnology firm, adding that it would engage with management and other investors to identify “a better path forward.”
Hedge fund Darwin Global, which said it owns 3.8% of Acceleron’s stock, earlier Wednesday also urged shareholders not to tender their shares. Another shareholder, Holocene Advisors, said last week that it didn’t plan to tender its shares.
After the Merck deal was announced, speculators and analysts wondered whether Acceleron would receive a higher offer from someone else.
“To the extent BMY was part of a process, it is plausible it did not have interest in buying XLRN,” UBS Group AG’s special situations team wrote in an Oct. 1 report, referring to the companies by their stock symbols. “That does not necessarily imply that it would support an acquisition of XLRN by a third party at any price (it could prefer to hold it as an investor).”
Acceleron engaged with several companies including Bristol-Myers to gauge interest in a potential acquisition before signing with Merck, Bloomberg reported this month. At least two potential buyers decided against bidding because of the price.
Bristol-Myers has royalty agreements with Acceleron that aren’t affected by its decision to tender its shares, according to a another person familiar with the mater.
(Updates with other investors in sixth paragraph)
Most Read from Bloomberg Businessweek
©2021 Bloomberg L.P.
