HealthCor Management Sends New Letter to ICOS (ICOS) Opposing Eli Lilly Takeover
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In an amended 13D filing on ICOS Corp. (Nasdaq: ICOS), 5% holder HealthCor Management, L.P. disclosed another letter sent to the company related to its view that the $32 per share merger agreement with Eli Lilly and Company (NYSE: LLY) significantly undervalues the company. The firm thinks the company is worth well in excess of $40 per share.
In its new letter sent to the ICOS board of director the group said, "The proposed purchase of ICOS by Eli Lilly is not an arm’s length transaction. The acquisition has not occurred in a market-based, competitive bid process. Therefore, in making its determination of fair value, we believe the Board of Directors must rely upon market-based comparables of similar transactions. We have clearly shown, in our initial communication to you, the flaws and distortions that are contained within the “Fairness Opinion” provided by Merrill Lynch. Without a competitive bid and without a “Fairness Opinion” that can be relied upon, the Board of Directors of ICOS is “flying blind” while trying to assess appropriate value."
In the letter, the firm noted the 101.6% premium Merck (NYSE: MRK) paid for Sirna Therapeutics Inc. (Nasdaq: RNAI); the 55.7% premium Abbott Laboratories (NYSE: ABT) paid for KOS Pharmaceuticals Inc. (Nasdaq: KOSP); and the 46.6% premium Genentech Inc. (NYSE: DNA) paid for Tanox Inc. (Nasdaq: TNOX). The firm compares this to the 18.2% premium Eli Lilly paid for ICOS.
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