How quickly things change. Last week, word was Baxter (BAX) spinoff Baxalta (BXLT) was in talks to acquire oncology focused Ariad Pharmaceuticals (ARIA). The rumored $2b price tag sent Ariad shares soaring, but alas, today shares are crashing on word the deal has been called off. According to Bloomberg, there were a couple of pretty big issues that emerged:
As well as disagreements over price, Baxalta also backed off after receiving negative feedback about the prospect of a takeover of Ariad from some of its own investors, one of the people said.
High price and shareholder discontent – not a good combo. Baxalta is currently being aggressively pursued by Shire (SHPG)(who has offered a stock swap) and approaching Ariad appeared to be a case of ‘the best defense is a good offense’. Management’s opinion that Shire’s offer is too low doesn’t appear to have changed so it looks like the company will have to shift its focus to defense – and plead its case to shareholders – in order to fend off Shire.
Disclosure: Author holds no position in any stock mentioned.