The German drugs and chemicals company Bayer has said it may have to raise its offer price for Schering to prevent rival Merck buying enough shares to block the takeover.
Bayer needs to have 75% of the shares for the merger to proceed and Merck already has amassed 20.6%. Bayer, which has sales last year of 9.41 billion euros, has the resources to increase its offer analysts say. Bayer has set itself a deadline of midnight on Wednesday to get all the shares it needs.
Its bid currently is for 16.5 billion euros. It has been paying 86 euros a share, but the feeling in the market is that it may have to increase that to as much as 90 euros each, which would add 600 to 700 euros to the final price. Right now it owns somewhere around 60% of the shares. Merck’s original – hostile – offer was for 14.9 billion euros; when Bayer topped that it pulling out .. but continued to buy shares.
Analysts say that Bayer is now likely to approach Merck with an offer to buy its Schering shares.