Chiron Corp. said it hasn't received any hostile takeover bids, but justin case, the Emeryville, Calif.-based company has implemented ashareholder rights plan designed as a poison pill for unwanted suitors.Larry Kurtz, Chiron's vice president of corporate communications, saidFriday the move is not a response to any particular threat. He saidChiron is not aware of any efforts to acquire the company. The plan, hesaid, is similar to protection strategies adopted by other companies,such as Amgen Inc., of Thousand Oaks, Calif., Genentech Inc., ofSouth San Francisco, and Genzyme Inc., of Cambridge, Mass.Joyce Lonergan, of Cowen & Co. in Boston, told BioWorld that Chironbecame worried about possible hostile acquisitions after AmericanCyanamid's experience with American Home Products. The latter's$9.7 billion takeover bid was accepted Aug. 17 after a two-week battle."They [Chiron executives] were surprised that Cyanamid was takenover in a hostile bid," she said, "and they realized they too could betaken over."Many companies, she added, have a shareholder rights plan in placefrom the time they begin trading publicly. The poison pill strategy canraise the cost of the takeover target's stock and dilute the shares for theacquiring company in an attempt to fend off a raid.Lonergan said "rumors are rampant" about takeovers in thebiotechnology industry, such as the chatter suggesting that Bristol-Myers Squibb Co., of New York, is interested in Amgen. Recentincreases in Chiron's stock price, she said, may be fueled byspeculation that it is a target. The stock (NASDAQ:CHIR) closedFriday at $67.50, up $3.75, a 6 percent increase.Chiron, Lonergan said, would be an attractive target as one ofbiotechnology's top tier companies and one of the few firms that isprofitable. For example, she observed, it would be a good fit forSwitzerland-based Ciba-Geigy Ltd. or Johnson & Johnson, of NewBrunswick, N.J. Both have current joint ventures with Chiron."In many cases companies could be talking to each other for years andnever go anywhere," Lonergan added.Chiron said that in association with its shareholder rights strategy itwill distribute a dividend of one preferred share purchase right on eachoutstanding share of common stock Sept. 6. The rights, which willtrade with Chiron's common stock, will expire in 10 years.Chiron said the shareholder rights plan will become effective if aperson or group acquires 15 percent or more of the company's stock ortenders an offer that would result in a 15 percent or more ownershipposition. n
-- Charles Craig
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