US Biotechnology company Chiron has rejected a takeover bid by Swiss drugmaker Novartis, citing a share as inadequate.
Chiron's stock rose 1.4% to .40 in early dealings, while U.S.-traded shares of Novartis edged up 0.6% to $ 49.40.
Novartis, a Swiss pharmaceutical giant, offered on Thursday to pay $ 40 a share in cash, or about $ 4.5 billion, to acquire the 58 percent of Chiron it did not already own.
The rebuff by Chiron could mean that Novartis will have to offer a higher price. Indeed, investors anticipated that, with Chiron's shares closing Friday above Novartis's offer, at .79.
Analysts reactions to the takeover offer have been mixed, with some emphasising the potential for Novartis to grab a slice of the fast-growing vaccines market, and particularly the influenza vaccine sector which is seeing rising demand as fears grow about the risk of another flu pandemic. On the other hand, Chiron's flu vaccine business is in the throes of major manufacturing quality-related problems that have yet to be resolved.
Chiron said in a statement that after a thorough analysis and consideration of Novartis' offer, its independent directors determined that the offer is inadequate.
A Novartis spokesman refured to comment on Chiron's statement.
The Chiron statement said that Chiron's independent directors have not solicited an offer to buy Chiron.
