Cephalon takeover bid for Sirtex fails

Sirtex shareholders watched their stocks slump today as potential takeover candidate Cephalon pulled out after acceptance had not reached the stated 90 per cent condition.

"The directors were disappointed with the overall result, even though they were pleased with the response from shareholders," said CEO Colin Sutton. "Their recommendation was that the shareholders accept the bid; unfortunately it failed," he added.

Cephalon's bid depended on the 90 per cent mark being achieved by end of trading on Tuesday, but by then only 88 per cent percent of Sirtex shares had been tendered in acceptance at the offer price of $AUD4.85.

Since Cephalon's release that it would not proceed, Sirtex shares dropped to a low of just over $4, but recovered a little to $4.30 at time of press.

Sutton said the response from all institutional stakeholders had been positive, apart from the WA-based Cancer Research Institute (CRI), Inc which did not tender its 8.9 per cent holding.

The CRI was one of the original players in the research on novel drug delivery mechanisms, one of which was SIR-Spheres, the platform coveted by Cephalon and the stated reason for its interest in Sirtex.

Dr Bruce Gray, executive chairman of Sirtex, was until recently medical director of the CRI -- the one investor that was reluctant to commit its shares. As a result of the failed bid, Gray said Cephalon would not be taking up its option on 19.9 per cent of his shares, fundamental to the original offer.

"It's just another day at the office," he said. "The company is strong and business will continue. We were within a whisker but the offer fell over. That's all."

Sutton said the Sirtex board would meet in the next few days to discuss future directions.

"It has been an interesting day," he said.