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Beckman Bid Now a Waiting Game

The ball in a “three-way tennis game” between Beckman Coulter Inc. and Inverness Medical Innovations Inc. lies in Biosite Inc.’s court.

Fullerton’s Beckman Coulter and Inverness of Massachusetts are locked in a battle to buy San Diego-based Biosite, a maker of diagnostic tests. Beckman’s offering $1.55 billion. Inverness upped the ante to $1.6 billion.

Some see the prospect of a bidding war,beyond what already took place before Beckman made its late March offer, which valued Biosite at 50% more than what it had been trading at.

For now, it’s a waiting game as Biosite weighs the Inverness counter offer.

“Right now, if you think of it as a three-way tennis game, the ball right now is in Biosite’s court,” said Quintin Lai, a life sciences and diagnostics analyst with Robert W. Baird & Co. in Milwaukee. “If Biosite determines that the (Inverness) financing is sound, then $90 will rule the day.”

Inverness is offering $90 a share for Biosite, versus $85 for Beckman.

“In that case, the ball then goes to Beckman’s court, and Beckman has to determine what they do,” Lai said. “It’s still not clear to me whether we’ll see lots of rounds of increased bids.”

Investors seem to expect a richer offer. Biosite’s shares were trading at about $93 at recent check with a market value of $1.5 billion. (The offers from Beckman and Inverness account for employee stock options that haven’t been exercised yet.)

Beckman, a maker of instruments and chemicals for medical testing labs and researchers, hopes enough Biosite shareholders will sign off on its original offer, which has financing lined up and promises a quick close. The company’s offer is good through Friday.

Beckman spokesman Paul Whitlock declined to comment on whether the company might come in with a higher offer.

“We have our offer in and it expires on the 27th,” he said.

Beckman’s strategy has been to cast doubt on Inverness’ offer, calling it “speculative.”

Inverness, in a Securities and Exchange Commission filing, said it has proposed financial commitments from General Electric Co.’s GE Capital, UBS Loan Finance LLC and UBS Securities LLC. The company has yet to specifically outline how it will pay for a deal.

Biosite isn’t discussing a public timeline for considering Inverness’ offer, a company spokeswoman said.

Beckman doesn’t have to increase its bid, analyst Lai said, “until Biosite decides their bid is no longer good.”

Biosite, which already has accepted Beckman’s offer, would have to pay a $50 million breakup fee to walk away, he said.


For more on this story, see the April 23 edition of the Business Journal.

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