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May 15, 2007

Beckman Coulter Bows Out of Acquisition Race for Biosite

  • Beckman Coulter has decided not to increase its acquisition price beyond $90 per share in spite of Biosite deeming Inverness Medical Innovations’ $92.50 bid superior. "Although we do not agree with this conclusion,” states Scott Garrett, Beckman Coulter's president and CEO, “we expect that Biosite will terminate its existing merger agreement with Beckman Coulter and, concurrently, pay Beckman Coulter a termination fee of $54 million.

    "Our priority throughout this process has been to create sustainable value for Beckman Coulter's shareholders,” Garrett continues. “We continue to believe the combination of Biosite with Beckman Coulter is strategically sound."

    The offer from Inverness provides that immediately after Biosite executes the merger, Inverness will make a payment to Biosite in an amount equal to the termination fee paid by Biosite to Beckman Coulter.

    The bidding war started at $85 per Biosite share with a tender offer from Beckman Coulter on March 26. Inverness trumped the price by $5 on April 5. After Biosite reported that this latter proposal was preferred, Beckman Coulter matched Inverness’ offer, which then responded with the latest proposal of $92.5 per share except for the 4.9% it already owns.

    With every change in acquisition price, the companies have also seen their own stock fluctuate on the market. Beckman Coulter, which lost almost 7% the day it made its initial offer for Biosite, saw its stock spike today. In midday trading, for the first time since the race to acquire Biosite started, Beckman Coulter stepped over $66, that much closer to the $67.08 price it enjoyed at the close of trading on March 25.

    The effect of the acquisition race on Biosite’s stock, on the other hand, was inverted compared to Beckman Coulter. Its shares sky-rocketed to the highest value year-to-date from $55.38 to $83.80 the day Beckman Coulter made its offer. After Inverness made its $90 proposal, Biosite has traded above this price, rarely falling below $92.5. Today, however, it opened at $91.7, about 3% below its closing value yesterday. Inverness is still trading below its closing price on April 4, opening today at $41.21.



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