Christmas came early to the Norwegian biotech company Algeta this week, after giant German firm Bayer offered NOK 17.6 billion (USD 3 billion) to take it over. If the sale goes through, Algeta’s management, board members and employees stand to rake in hundreds of millions in cash.
Newspaper Dagens Næringsliv (DN) reported on Friday that each of Algeta’s roughly 160 employees can receive around NOK 1.7 million on average, while the 13 persons in Algeta’s top management hold options worth NOK 375 million. If the board accepts Bayer’s offer, they’ll stand to receive around NOK 28.9 million each.
Bayer sweetened its bid
Bayer first offered NOK 336 per share earlier this fall, a price analysts felt was too low for the company that develops radiation technology to treat advanced forms of cancer that’s spread to a patient’s skeleton. The company was founded in 1997 by chemists Roy Larsen and Professor Øyvind Bruland, and went public 10 years later.
Bayer has since sweetened its offer, to NOK 362 per share, and Algeta’s board is recommending that shareholders accept it. Included among Algeta’s biggest shareholders are the Norwegian state pension fund Folketrygdfondet, with 9.7 percent, Svenska Handelsbanken with 13.8 percent and State Street Band & Trust Co with 8.53 percent.
The pension fund along stands to earn NOK 800 million on its stake, prompting director Nils Bastiansen to say that “it’s nice to be part of financing the development of a new successful firm in such a demanding branch.” Bayer’s bid means that Algeta’s share value has more than doubled in the past three years.
High risk, high reward
“This is a very demanding branch to invest in, with long and complicated processes before the economic results come,” Bastiansen told DN. “The shareholders take a high risk along the way, and in Algeta’s case, the risk has yielded good rewards.” He remained non-committal, though, about Bayer’s bid, saying merely that “it would be evaluated in the normal manner.”
Bayer, keen on carrying on Algeta’s work, has secured itself around 14 percent of the stock already. Employees reportedly weren’t getting carried away by the prospect of huge cash gains.
“There is still some uncertainty around the situation, and for many, this can mean changes in their everyday work,” Øystein Soug, finance director in Algeta, told DN. He said all employees have received stock options in the company as part of their compensation package.
“But we expect that Bayer will retain Algeta more or less in its current form,” Soug said. Around half of Algeta’s employees work in the US, the rest in Norway.
newsinenglish.no/Nina Berglund
