Schering Rejects Takeover Bid By Pharmaceuticals Giant Merck
March 15, 2006
Following a special meeting of its supervisory board on Tuesday evening, Schering's managing director, Hubertus Erlen said the board had rejected Merck's takeover bid as inappropriate.
He added that he had the support of the board to use "all options" to continue to raise Schering's value independently.
Merck, the world's oldest pharmaceuticals firm, said on Monday that it was offering 77.0 euros ($92) per share or 14.6 billion euros overall to buy Schering, a world leader in contraceptives and fertility drugs, in a bid to become one of the leading drug makers in Europe.
Berlin-based Schering promptly turned down the advances of the 338-year-old family-run Merck, saying the offer price "significantly undervalues" its business.
Merck adopts wait-and-see approach
Merck indicated that it was not ruling out raising its bid. The company would first wait and see whether a rival offer materialized from a third party, Merck's supervisory board chief
Wilhelm Simson told a news conference in Berlin.
But Merck was not prepared to pay so high a price that a purchase could only be financed by selling off bits of Schering, Simson added. The price of 77 euros per share was "fair", he continued. And Simson said he hoped to meet with Schering's chairman Hubertus Erlen later on Tuesday.
"Our main aim is to enter into negotiations with Schering," he said. "We need both sides to come to the table."
Berlin mayor frets over implications
In the meantime, Berlin's Mayor Klaus Wowereit said he was "concerned" about Merck's plans to buy Schering, which is one of the biggest employers in the German capital.
After meeting with Merck chairman Roemer, Wowereit, a member of the Social Democratic Party (SPD), said he was worried about the fate of Schering's 6,000 employees in Berlin.
Schering is the only DAX-listed company that has its headquarters in Berlin and is one of the biggest employers in the German capital after rail operator Deutsche Bahn.
Berlin is home to very little industry and suffers from very high unemployment.
Suggestions last year that rail operator Deutsche Bahn could relocate some of its administrative activities to Hamburg sparked political uproar, eventually persuading the company to back down and remain in Berlin.