Despite raising its bid for Celesio by about $100 million, McKesson Corp.
announced Monday that it was unable to secure the 75% of shares and convertible bonds it needed to acquire the German drug wholesaler and retail pharmacy operator.
McKesson originally offered to purchase Celesio for 23 euros per share, or about 6.1 billion euros ($8.3 billion), including debt. But when hedge fund Elliott Management Corp., Celesio's second-largest shareholder, rejected the bid as too low, McKesson countered last week with what it called its “best and final offer.”
McKesson's shares dipped more than 5% on New York Stock Exchange on Monday afternoon after a brief trading halt as news of the failed Celesio bid was announced.
The San Francisco-based drug distributor raised its bid for Celesio to 23.5 euros per share, or about 6.2 billion euros ($8.4 billion). It was enough to get the approval of Celesio's majority shareholder—investment company and 50.01% owner Franz Haniel & Cie.—but not enough for Elliott and the remaining smaller investors to tender all of their shares.
“While we are disappointed that we were not successful in completing our offers for Celesio, we have a track record of great performance, a strong balance sheet and demonstrated leadership and scale across our markets,” McKesson's Chairman and CEO John Hammergren said in a release
concerning the failed deal.Hammergren
went on to say that McKesson would continue looking at other opportunities to strengthen its business. McKesson and its rivals AmerisourceBergen and Cardinal Health control about 95% of the U.S. market share for drug distribution.Follow Rachel Landen on Twitter: @MHrlanden