Bristol-Myers Is Said to Have Weighed Offer for Acceleron

(Bloomberg) -- Acceleron Pharma Inc. engaged with several companies including Bristol-Myers Squibb Co. to gauge their interest in a potential acquisition before Merck & Co. agreed to buy the company for $11.5 billion in the biggest biotechnology deal of 2021, according to a person familiar with the matter.

Bristol-Myers engaged with Acceleron on pursuing an offer but decided against it due to the price, said the person, who asked to not be identified because the details weren’t public. It instead floated a proposal in which it would forgive some of Acceleron’s future royalties, an offer Acceleron rebuffed. Some of these details were outlined in a regulatory filing Tuesday that didn’t identify Bristol-Myers. 

A representative for Bristol-Myers didn’t immediately comment. A representative for Acceleron declined to comment. 

Acceleron said in the filing that Chief Executive Officer Habib Dable contacted the CEO of an unidentified company, “Party A,” during the second week of August, informing him that it had received an unsolicited takeover offer and asking whether the company would be interested in pursuing a potential deal. The CEO of the company, which the person familiar with the matter said was drugmaker Bristol-Myers, informed Dable that it “was interested in evaluating the opportunity.”

In July, Merck had made a non-binding indication of interest to acquire all of Acceleron’s shares for $160 apiece in cash, according to the filing. That was $20 below the value ultimately agreed to in September. 

Acceleron shares were down 0.5% to $174.16 at 1:31 p.m. in New York on Tuesday, giving the company a market value of about $10.6 billion. 

About a week after Acceleron approached Bristol-Myers, the drug company executed a confidentiality agreement with Acceleron, spoke with Acceleron’s management and received access to its data room. Ten days after signing the confidentiality agreement, Bristol-Myers informed Acceleron’s bankers that an analysis of its drug Sotatercept didn’t support an acquisition proposal at the company’s current market value, according to the filing. 

Bristol-Myers later offered an alternative proposal that didn’t involve an acquisition. Bristol-Myers proposed that Acceleron would get full forgiveness on some future royalties, among other conditions. Acceleron rejected that for tax reasons and because it felt that such an agreement would reduce its ability to diversify, thus increasing risk, according to the filing. Bristol-Myers holds an 11.5% stake in Acceleron that it inherited when it bought Celgene Corp. in 2019. 

Additional Parties

Acceleron engaged with at least two other parties before announcing its deal with Merck, including one that expressed interest in purchasing Acceleron a year earlier and another that approached Acceleron about a license and collaboration agreement in April, according to the filing.

The first, “Party C,” told Acceleron’s bankers when contacted in August that it didn’t have interest in pursuing a deal because of “other strategic priorities,” according to the filing. 

The second, “Party B,” contacted Acceleron’s board and management to express interest in a takeover on Sept. 24, the day Bloomberg News reported that Acceleron was in advanced discussions to be acquired by a large pharmaceutical company for about $180 a share in cash. Acceleron’s bankers informed Party B that a serious offer would need to contain a price, an antitrust clearance commitment and a commitment to a speedy timeline. The company ultimately decided against submitting a proposal because it couldn’t top the $11.5 billion offer and was unwilling to make the regulatory clearance commitment. 

©2021 Bloomberg L.P.