Two days after a deadline expired in a hostile bid to acquire it, Biosite's (San Diego) board of directors said it will consider the possibility of an acquisition by new suitor Inverness Medical Innovations (IMI; Waltham, Massachusetts) and begin negotiations, after determining it is likely to lead to a superior proposal than its current offer from Beckman Coulter (BC; Fullerton, California).

After consultation with its financial and legal advisors the Biosite board said the IMI offer — which at $90 a share is about a 5.9% premium over the BC offering price of $85 a share (about $1.55 billion) — first disclosed last month (Medical Device Daily, March 27, 2007) was "likely to lead to a superior proposal." The board noted, however, that it "has not determined that the Inverness acquisition proposal constitutes a superior proposal."

The Biosite board went on to say that it has not "approved, endorsed or recommended the Inverness acquisition proposal," and added that it has not "withdrawn, qualified, modified, changed or amended its recommendation with respect to the Beckman Coulter tender offer, and the merger agreement between Biosite and Beckman Coulter remains in effect."

Expressing confidence that its deal is still superior, even at a reduced price, Scott Garrett, Beckman Coulter's president/CEO, said the company remains committed to its acquisition of Biosite and will waive the merger agreement provision that Biosite provide the company with 48 hours notice before negotiating with Inverness.

"The conditional and uncertain terms of the Inverness offer should give the Biosite board and its stockholders enormous pause," said Garrett. "In our view, the fact that Inverness has not proposed a tender offer, which could be concluded relatively quickly, speaks volumes about the firmness of its financing. Inverness' financing 'commitments' contain remarkably broad conditions and contingencies. It is not surprising, therefore, that Inverness instead is suggesting a one-step transaction — one that would take months to complete."

Garrett further suggested that the Biosite board should communicate the risks and uncertainties of the Inverness offer to Biosite's stockholders who, based on trading levels in the marketplace, may be unaware of these risks.

"We remain committed to our transaction with Biosite and continue to be very enthusiastic about the prospects for developing Biosite and Beckman Coulter as a combined business," Garrett added. "We believe Biosite stockholders will conclude that Inverness is unable to make an offer for Biosite that is as compelling as the definitive transaction between Beckman Coulter and Biosite which is scheduled to be completed within the next 25 days. By waiving this 48-hour notice period, we are seeking to resolve the uncertainty in the marketplace resulting from Inverness' offer as quickly as possible."

Biosite, a biomedical company commercializing proteomics discoveries for the advancement of medical diagnosis, said last week that Inverness is offering "substantially similar business terms" to Beckman's offer.

In a letter to Biosite's board last week that coincided with its richer offering, Ron Zwanziger, IMI's president/CEO and chairman, pointed out that executives from Inverness "have made repeated attempts over the past 10 months to engage the Biosite management team and board in a meaningful dialogue about a potential combination of our two companies." He said that as recently as Feb. 20, Inverness submitted a proposal to acquire Biosite and subsequently entered into a confidentiality agreement for the express purpose of working with Biosite to explore the possibility of enhancing that offer. "We were therefore extremely surprised and disappointed by your announcement on March 25 of an agreement with Beckman Coulter," he added.

In his letter, Zwanziger also indicated that his company was prepared to bring its proposal directly to Biosite's shareholders" if they didn't hear back from Biosite by April 8, a deadline the Biosite board let expire without an immediate reply.

BC's tender offer for Biosite shares is set to expire on April 27, unless extended.