Bristol-Myers Squibb Co (BMY.N) has
offered to buy ImClone Systems Inc (IMCL.O) for $60 a share,
valuing its biotech partner at $5.2 billion, in a deal that
would give it greater control of the cancer drug Erbitux.
ImClone shares jumped 38.2 percent to $64.20 in morning
trading on Thursday, well above the offer price, reflecting the
expectation that the company will command a higher offer.
"I think they may have to pay closer to a 50 percent
premium," said Summer Street Research analyst Carol Werther.
"ImClone has a superb pipeline, and I think you have to value
The unsolicited offer, which represents a roughly 30
percent premium over Wednesday's closing price, marks the
latest in a spate of pharmaceutical-biotech deals, including
Roche Holding AG's (ROG.VX) recent $43.7 billion bid for the
part of Genentech Inc (DNA.N) it doesn't already own.
A buyout would represent the latest twist in ImClone's
colorful history. Stock trades in late 2001, based on insider
news about Erbitux, landed ImClone's original CEO, Sam Waksal,
and his friend Martha Stewart in jail.
According to a regulatory filing, Bristol Chief Executive
James Cornelius made the offer to Carl Icahn, the billionaire
investor who is also ImClone's chairman.
ImClone and Icahn were not immediately available for
The offer values ImClone at $5.2 billion, based on the
number of shares outstanding at the end of April. Bristol
already owns 16.6 percent of ImClone's outstanding shares,
according to the filing.
New York-based Bristol said the acquisition of Erbitux
would help it maximize its sales and earnings ahead of the
expected U.S. patent expiration for its blockbuster blood-clot
preventer Plavix, which could occur as soon as 2011.
"Bristol-Myers Squibb is the natural partner for ImClone as
we possess the knowledge base and resources to advance the
company's growth over the long-term," Cornelius said in a
Sanford Bernstein analyst Tim Anderson said that buying
ImClone would make Bristol "a more 'sellable' company itself by
making Bristol a more robust cancer company."
Bristol shares fell 31 cents, or 1.4 percent, to $21.20 on
the New York Stock Exchange.
Morningstar analyst Karen Andersen said Icahn would
probably test how far Bristol is willing to go for ImClone.
"It's hard to see who would be willing to offer a larger
premium for ImClone than Bristol," Andersen said, "but the
market is pushing up the shares because of Carl Icahn's history
of getting a company sold at a price that he sets."
When asked if the ImClone trading implied investor
confidence that Bristol-Myers would have to raise its bid,
Bristol spokesman Brian Henry said he could not comment on
Bristol said the pending sale of its Convatec wound-healing
business would largely pay for the deal.
For nearly seven years, Bristol and ImClone have had a
relationship centered on Erbitux, whose second-quarter global
sales rose 33 percent to $423.3 million. Bristol co-promotes
Erbitux in the United States, Canada and Japan.
German drug maker Merck KGaA (
Erbitux in other countries.
"I think from Bristol's perspective they are trying to get
ahead of potential positive events for ImClone that could push
the value of ImClone's shares up by themselves," said Janney
Montgomery Scott analyst Brian Rye.
If it does not acquire all of ImClone common stock, Bristol
may sell its stake, according to the filing.
Bristol said its financial advisers were Morgan Stanley,
Citigroup and Credit Suisse.
(Reporting by Lewis Krauskopf, Toni Clarke, Dane Hamilton
and Ransdell Pierson; editing by Dave Zimmerman, Derek Caney
and Lisa Von Ahn)
Exxon Mobil Corp (XOM.N) said on
Thursday soaring oil prices pushed its second-quarter earnings
up 14 percent, again breaking its own record for the
highest-ever profit by a U.S. company.
Net income in the quarter rose to $11.68 billion, or $2.22
a share, from $10.26 billion, or $1.83 a share, last year.
Exxon -- the world's largest publicly traded company --
previously set the high-water mark for quarterly earnings in
the fourth quarter of last year, when it brought in $11.66
Despite the new record, Exxon's results lagged behind
The company posted operating earnings of $2.27 a share in
the quarter, which exclude a $290 million charge related to the
recent Supreme Court ruling in the Exxon Valdez case. Analysts,
on average, had expected the company to earn $2.53 a share,
according to Reuters Estimates.
Revenue in the quarter rose about 40 percent to $138.07
Exxon both produces oil and refines it to make gasoline,
and profit margins for gasoline were weak during the quarter,
holding back earnings slightly.
The company said earnings from its exploration and
production business rose about 68 percent to $10.01 billion.
But its refining and marketing earnings fell about 54 percent
to $1.56 billion.
U.S. oil prices averaged slightly less than $125 a barrel
in the quarter, nearly double prices from a year earlier.
Gasoline prices only rose 25 percent during that same period,
resulting in weak profit margins for the fuel.
Shares of Exxon Mobil fell 2.2 percent in pre-market trade
after its earnings were announced. Through Wednesday's close,
they were down about 10 percent this year, underperforming the
Chicago Board Options Exchange's oil index (.OIX), which has
fallen about 5.2 percent over the same period.
(Reporting by Michael Erman, editing by Dave Zimmerman)
Motorola Inc (MOT.N) posted a small
quarterly profit on Thursday as it sold more mobile phones than
expected and narrowly kept its No. 3 global ranking in the
mobile phone market ahead of LG Electronics Inc (066570.KS).
Shares jumped 13 percent after Motorola also said it
expects to report a profit for the full year of 6 cents to 8
cents per share on continuing operations.
Analysts were looking for full-year earnings of 3 cents per
share, according to Reuters Estimates.
"They've managed to minimize handset share losses even in
the face of fairly aggressive competition particularly from the
Koreans in North America," said Nomura analyst Richard Windsor,
referring to LG and Samsung Electronics Co (005930.KS).
"They've managed to hang on to more market share than we
expected and managed to do it without cutting prices too much,"
Motorola said it shipped 28.1 million phones in the second
quarter and maintained its share of the market. Nine analysts
surveyed by Reuters had on average expected 26.6 million.
Second-quarter profit was $4 million and broke even on a
per share basis, compared with a loss of $28 million, or 1 cent
a share, in the year-ago quarter.
Excluding charges, Motorola earned 2 cents per share,
beating the average Wall Street forecast of a loss of 3 cents
per share, according to Reuters Estimates.
Revenue fell 7 percent to $8.1 billion but topped the
average forecast by analysts of $7.7 billion.
Motorola forecast third-quarter earnings per share from
continuing operations in a range of break-even to 2 cents. It
said its outlook excludes charges from its operating expense
reduction initiatives or other items.
While the results were positive, analysts said Motorola
still had a long way to go to turn around, after it has been
losing market share to Finland's Nokia (NOK1V.HE) and other
rivals for more than a year.
"It still has a mountain to climb. Its product portfolio is
still not competitive enough and sustaining its position in the
North American market in the second half of 2008 may prove
challenging," said Geoff Blaber, an analyst at CCS Insight.
Motorola said its mobile devices business posted a wider
operating loss of $346 million compared with an operating loss
of $332 million a year ago on revenue that fell 22 percent to
Motorola's television set-top box and networks equipment
division posted operating earnings of $245 million, up 28
percent from a year ago, on sales of $2.7 billion, which were
up 7 percent from a year earlier.
The enterprise mobility unit saw sales rise 6 percent to $2
billion from the year-ago quarter.
Motorola, which has said it plans to spin off its mobile
device business next year, has seen its shares fall more than
70 percent since October 2006 when its financials first started
to deteriorate. It has also faced pressure from activist
investor Carl Icahn to turn around the business.
Its shares rose to $8.70 in premarket trade from their
previous New York Stock Exchange close of $7.68.
(Additional reporting by Tarmo Virki in Helsinki; Editing
by Steve Orlofsky)