CV Therapeutics Next In Bio-Health Merger Line (CVTX)

CV Therapeutics, Inc. (NASDAQ: CVTX) is seeing a surge in its shares this morning.  It looks like CV is the next biotech merger target now that Astellas Pharma Inc. submitted a $16.00 buyout offer to CV’s board of directors.  The buyout offer is an all cash transaction offer for all of the outstanding shares of common stock.  A 41% premium to yesterday’s close is also representative of a 33% gain above its 52-week high and roughly 200% from its 52-week low.

This merger offer is also not subject to financing conditions andwould value CV at $1 billion.  This proposal was originallysent in a letter dated November 14 and Astellas was informed onNovember 21 that CV Therapeutics had rejected the proposal.

The company goes on to state that CV Therapeutics has subsequently declined toengage Astellas in any meaningful discussions regarding a transaction, even as recently as January 13.  Astellas looks like it is taking this fight straight to CVTherapeutics’ shareholders.  The company even noted, "Astellas hasbuilt a productive partnership with CV Therapeutics around Lexiscanover several years, and we have watched and helped the company growduring this time."

Back in 2007 and 2006 it looks like CV Therapeutics shares were were much higher.  Andshares were even many times higher earlier this decade.  But the mergerproposal represents a 69% premium to the 60-day average.

Shareholders now have some deciding to do. Analysts expect wide losses of -$0.85 EPS forall of 2009 on revenues of almost $225 million.

This is actually trading at a premium to the buyout price.  Shares areup 50% at $17.05 with just under an hour until the market opens.

Jon C. Ogg
January 27, 2009