Monday February 23, 08:53 AM
UPDATE 2-Merck KGaA agrees to buy MediCult for $55 mln
LONDON, Feb 23 (Reuters) - Germany's Merck KGaA (MKGAY.PK - news) agreed to buy MediCult for 383 million Norwegian crowns ($55.1
million) to boost its fertility treatment business, trumping a rival offer.
Merck said on Monday it had won unanimous backing from MediCult's board for its bid and would launch a recommended cash tender at 13.50 crowns per share.
That represents a 65 percent premium to the price on Jan. 13, the day before Sweden's Vitrolife (Stockholm: VITR.ST - news) announced its bid for MediCult.
It is also 27 percent above the implied value of Vitrolife's share-for-share offer, based on Feb. 20 closing prices.
Shares in MediCult jumped 21 percent to 12.85 crowns by 0830 GMT.
Infertility is one of four areas of medical research that Merck's drug division is focusing on and the German group said MediCult's products, which include nutrient solutions for in-vitro fertilisation, would complement its franchise.
MediCult, which was founded in 1987, is based in Denmark and holds around one fifth of the world market for culture media for assisted reproduction technologies, according to the company's website.
MediCult's 2008 sales were 203.2 million Danish crowns ($35.3 million), up 44 percent on 2007, while earnings before interest, tax and amortisation were 25.3 million, up 53 percent.
Merck said the acquisition would be financed through existing funds or lines of credits. Details will be sent to MediCult shareholders at the latest during the week of 23 March.
(Reporting by Ben Hirschler and Ludwig Burger in Frankfurt; editing by John Stonestreet) ($1=6.945 Norwegian Crown) ($1=5.764 Danish Crown) Keywords: MEDICULT/MERCKKGAA
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