Australian cancer company Sirtex (ASX:SRX) has announced it has accepted a $1.9 billion takeover bid from Chinese company CDH Genetech Limited.
The bid, which values Sirtex at $33.60 per share, is being officially jointly made by CDH and its strategic partner, China Grand Pharmaceutical and Healthcare Holdings Limited (CGP).
CDH made a non-binding offer for Sirtex in May just days before the planned finalisation of a $1.6 billion takeover bid made by US-based Varian.
Varian recently confirmed it would not match CDH's higher bid for the company best known for the SIR-Spheres microspheres technology used in the treatment of advanced liver cancer.
In a statement, interim chair of Sirtex Dr John Eady said: "The Board has undertaken a comprehensive investigation of the merits and risks of the CDH-CGP Proposal, including seeking specialist advice in relation to specific regulatory, legal, funding and other risks.
"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 interests of shareholders."
Sirtex said its Board now "unanimously recommends" shareholders back the CDH-CGP Proposal. It also confirmed Varian will receive a $16 million 'break fee' as a result of the decision to back the CDH-CGP Proposal. The Board had previously signed an implementation deed with Varian.
According to Sirtex CEO Andrew McLean, "The CDH-CGP Scheme represents an exciting opportunity to enhance the growth of the Sirtex business, including through entry into new geographies, and we look forward to working with CDH and CGP to implement the transaction. I would also like to thank the Varian team for their professional and constructive approach throughout the period of our engagement."
The takeover by CDH-CGP must meet a number of conditions, including approval by the Australian government's Foreign Investment Review Board.