FRANKFURT (Reuters) - Hedge fund Elliott International remains opposed to U.S. wholesale drugs group McKesson’s (MCK.N) $8.3 billion offer for European counterpart Celesio CLSGn.DE, it said on Monday, warning it was “irrevocably bound” not to accept the bid in its current form.
McKesson, the largest U.S. drugs wholesale group, agreed to buy Celesio in October for 23 euros per share in cash, seeking to expand abroad and boost its purchasing power with pharma majors.
Elliott, run by U.S. investor Paul E. Singer, has spent about 800 million euros ($1.09 billion) on building a stake of more than 20 percent in Celesio and earlier this month said it would not tender its shares in Celesio, urging McKesson to sweeten its offer.
“Elliott has seen reports suggesting that it will change its mind and accept McKesson’s offer. These reports are categorically incorrect,” Elliott said in a statement on Monday.
“To be absolutely clear, Elliott’s final, binding decision is not to accept McKesson’s offer on its current terms.”
Celesio declined to comment. A Germany-based spokesman for San Francisco-based McKesson also declined to comment.
The largest German healthcare deal since drugmaker Bayer (BAYGn.DE) bought rival Schering in 2006 will give McKesson about 22 billion euros in annual revenues from Celesio, creating a more than $150 billion global drugs wholesaler and pharmacies group.
Shareholders of Celesio, whose shares were down 0.7 percent at 22.83 euros by 1038 GMT on Monday, can tender their shares until January 9, 2014.
McKesson and its closest U.S. rivals, AmerisourceBergen (ABC.N) and Cardinal Health (CAH.N), have all been looking to grow outside their domestic market, where they command a combined 95 percent share.
Elliott, which says McKesson’s current offer substantially undervalues Celesio, has 25.16 percent of the voting rights in the company. When shares from Celesio’s two convertible bonds are taken into account, the investor’s voting stake is 22.7 percent.
The investor has been strongly active in Germany this year, having also built a large position in Kabel Deutschland KD8Gn.DE and aiming to sue bidder Vodafone (VOD.L) for a better price than was accepted by other shareholders, according to people familiar with the matter.
Reporting by Christoph Steitz; Editing by Greg Mahlich