December 20, 2005 2:00 am

Novartis circles over Crucell prey

Crucell, the Dutch biotech company, yesterday de-fended its SFr530m ($409m) all-share offer for Berna Biotech of Switzerland, as signs grew that Novartis, the Swiss pharmaceutical group, was likely to make a cash counter-bid.

Shares in Berna jumped 12 per cent after Novartis made an announcement on Sunday night, triggered by a media report, that it was "exploring the benefits" of acquiring the company to combine with the recently purchased vaccine group Chiron of the US.

The move marks a fresh sign of intensifying interest in vaccines by the pharmaceutical sector, at a time of rising prices and growing markets, in part fuelled by concerns about a bird flu pandemic.

Novartis recently completed the $5.1bn acquisition of Chiron, a vaccine manufacturer based in California, and is interested in further acquisitions and deals to strengthen its franchise.

Leonard Kruimer, chief financial officer of Crucell, which unveiled its offer for Berna on December 1, told the FT yesterday: "We stand by our bid, which would allow us to become the largest independent player in vaccines."

He stressed that the boards of Crucell and Berna had approved the takeover, and that its offer for a share exchange was already open until January 20, subject to final approval by shareholders of both companies in the second week of next month.

He said Berna's commercialised products and late-stage pipeline of future vaccines, notably for the developing world, represented "a strategic fit" with Crucell's earlier stage pipeline and technology platform.

However, in a statement that played to Swiss patriotism and hinted at tactics in what could turn into a bidding war ahead, Novartis said its bid "would assure continued Swiss ownership of an increasingly important healthcare business with public health responsibilities".

Company officials, who said that due diligence was now under way, also played up the advantage of a likely cash-only bid for Berna by Novartis, in contrast to Crucell's all-share offer with the risks of its fluctuating value and currency risk.

"If we decide to bid, it would be a competitive all-cash offer of a higher quality than an all-share deal which would reflect the value of the company," said John Gilardi, a Novartis spokesman.

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