Merck Ups Schering Stake, Challenging Bayer Takeover Plan
June 12, 2006
According to newspaper reports, Bayer is attempting to get a temporary injunction against Merck to stop it from acquiring too many shares.
Merck, which withdrew its hostile takeover bid for Schering in March, said in a statement to the US Securities and Exchange Commission over the weekend that it had boosted its shares in Schering to 18.6 percent Friday, up from the 10.1 percent it had held.
The move poses a potential challenge to Bayer's aim to acquire at least 75 percent of the company. Bayer currently holds 61 percent of Schering but needs to obtain 75 percent for the takeover to be binding.
Surprise move
If Merck were able to boost its stake to over 25 percent, it would scupper Bayer's planned 16.5 billion euro ($20.9 billion) acquisition.
The German media said Merck's actions had caught the industry by surprise and sparked broad speculation about the company's motives.
Bayer said in late May that it was extending the deadline for its takeover of Schering by two weeks until June 14 as shareholders of the pharmaceuticals specialist were proving slow to accept the offer.
Bayer is offering Schering shareholders 86 euros in cash for each share held. The Leverkusen-based chemical concern has apparently tried to combat Merck's share purchase plans, according to a report in Germany newspaper Handelsblatt.
Bayer accused Merck of not clearly stating its intentions in buying up more Schering shares, as it is required to do under US law. Schering is traded on the US stock market.