Does CV Therapeutics (CVTX) Have A Case of Merger-Cockiness?

January 27, 2009 1:18 PM EST

Today, Astellas Pharma went hostile with its $16 per share bid for CV Therapeutics, Inc. (Nasdaq: CVTX) after CV rejecting the initial offer. The $16 offer represents a 41% premium yesterday's closing share price and a 69% premium to its 60-day average closing price. Are they crazy?

It appears CV Therapeutics forgot the lessons of recent merger-cockiness gone awry in the last year. Well here is a refresher course for them:

- Yahoo! (Nasdaq: YHOO) rejects $31 bid from Microsoft (Nasdaq: MSFT). Today's Price = $11.15
- Rio Tinto (NYSE: RTP) rejects takeover from BHP when stock was over $400 per share. Today's Price = $93
- Take-Two Interactive Software (NASDAQ: TTWO) rejects $26 offer from EA (Nasdaq: ERTS). Today's Price = $7.50
- SanDisk (Nasdaq: SNDK) rejected at $26 offer from Samsung. Today's Price = $12
- Heelys, Inc. (Nasdaq: HLYS) rejected a $5.25 shares offer from Skechers (NYSE: SKX). Today's Price = $2.00.
- Mentor Graphics (Nasdaq: MENT) rejected a $16 offer from Cadence Design (Nasdaq: CDNS). Today's Price = $5.
- Calpine Corp. (NYSE: CPN) rejcted $23 offer from NRG Energy, Inc. (NYSE: NRG). Today's price = $7.25
- Genentech Inc. (NYSE: DNA) rejected an $89 offer from Roche. Its stock has since dropped to $84.

So, based the data points above, it looks like they are crazy for not taking the deal.

But CV Therapeutics has one thing going for them. That thing is the sector that they play in - biotech.

Biotech has been one of the few sectors actually seeing deals, and the deals have been at nice premiums. Maybe CV belives they can hold on for more money from Astellas or another suitor.

Some notable deals in biotech/phama over the past year:
- Johnson & Johnson (NYSE: JNJ) bought Omrix Biopharmaceuticals, Inc. (Nasdaq: OMRI) for approximately $438 million
- Sciele Pharma, Inc. (NASDAQ: SCRX) was bought for $1.1 billion
- Eli Lilly and Company (NYSE: LLY) bought ImClone Systems (Nasdaq: IMCL)
- Invitrogen Corporation (NASDAQ: IVGN) merger with Applera's Applied Biosystems Group (NYSE: ABI)
- Johnson & Johnson (NYSE: JNJ) bought Mentor Corp. (NYSE: MNT) for $1.07 billion
- King Pharmaceuticals, Inc. (NYSE: KG) bought Alpharma, Inc. (NYSE: ALO)
- Teva Pharmaceuticals (Nasdaq: TEVA) bought Barr Pharmaceuticals, Inc. (NYSE: BRL)
- Takeda Pharmaceutical agreed to acquire Millennium Pharmaceuticals, Inc. (Nasdaq: MLNM) for $8.8B
- Pfizer (NYSE: PFE) buys Wyeth (NYSE: WYE) in $68B deal

CV Therapeutics has not commented on the offer yet.

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