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New Development in Amgen offer To Acquire Onyx

Prohost Biotech - Sunday, June 30, 2013

In a new development, Onyx (ONXX) confirmed Amgen’s offer in the same release that announced rejecting it. Indeed, Onyx has rejected Amgen’s unsolicited proposal that suggests acquiring Onyx’s outstanding shares and share equivalents for $120 per share in cash, subject to due diligence and other conditions.

Why the rejection?

According to Onyx’ press release, consulting with its financial and legal advisors Onyx Board concluded that Amgen’s proposed offer significantly underestimates the firm’s value and prospects and was not in the best interest of the Company or its shareholders.

It seems that other entities had expressed interest in Onyx, as following Onyx’ decision to reject Amgen’s offer the company’s Board has immediately authorized its financial advisors Centerview Partners, LLC and Goodwin Procter, LLP to contact potential acquirers in order to reach a transaction that would be in the best interest of Onyx shareholders. The firm’s press release hinted to the presence of interested third parties.   

On Monday, Onyx’ shareholders will wake up facing the following choices:

- Selling the stock that appreciated by 30% in a couple of minutes on Friday at $109.   

   - Waiting for a third party offer that might make a higher than the $120 offered by Amgen.  

   - Waiting in expectation that Amgen might come back with a much better offer.     

- Relying on the firm’s estimation of its much higher value and stay with ONXX

Difficult choices we know. It is not easy for shareholders to accept $109 when an offer was made at $120. The other choices are more promising, but are yet to be made. Amgen might indeed come back with another better offer if it is convinced that adding the two firms’ products and investigational pipeline products will, indeed, enhance its growth potential.  

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

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