Sirtex Medical, which makes a liver cancer treatment, accepted a $1.4 billion buyout offer from China’s CDH Investments and China Grand Pharmaceutical and Healthcare in a deal it expects to win regulatory approval.
The Chinese consortium outbid a previous offer by U.S.-based Varian Medical Systems by pledging to buy 100% of Sirtex stock at $25.10 per share. Sirtiex said that it expects to win approval from Australia’s Foreign Investment Review Board despite recent tensions between the two countries, Reuters reported.
Sirtex, an Australian biotech, specializes in the treatment of liver cancer with its lead product SIR-Spheres, which are radioactive beads that target high doses of radiation to liver tumors. Sirtex has manufacturing capabilities in the U.S., Singapore and Germany.
“Based on the materially higher offer price and our evaluation of the associated risks, the board of Sirtex has formed the unanimous view that the CDH-CGP proposal is a superior proposal and is in the best interest of shareholders,” Dr. John Eady, Sirtex interim chairman, said in a statement.
Earlier this year, U.S.-based Varian Medical Systems made a surprise $1.3 billion bid for Sirtex that the board of directors initially supported. As a result of the CDH deal, Sirtex will have to cough up about $12 million for a break-up fee with Varian.
If shareholder and regulatory approvals are reached, Sirtex expects the deal to close in September.