Feb. 27 (Bloomberg) -- CV Therapeutics advised its shareholders to ignore a $1-billion cash bid from Astellas after the Japanese drugmaker went hostile with its buyout offer after three months of disagreement.

Astellas, Japan’s second-biggest drugmaker, will start a tender offer at $16 a share today, the Tokyo-based bidder said in a statement. That’s the same price the board of Palo Alto, California-based CV Therapeutics, maker of the Ranexa chest-pain treatment, rejected as too low on Feb. 20. CV Therapeutics “advised its shareholders to take no action at this time,” the company said today in a statement.

The bid may foreshadow a fight to oust Louis Lange as chief executive officer and chairman of CV Therapeutics. Lange is one of two directors whose terms expire at this year’s annual meeting, according to a regulatory filing. Astellas needs board support to complete the purchase after CV Therapeutics renewed a so-called “poison pill” takeover defense last month.

Astellas has “serious intentions” to acquire CV Therapeutics and may eventually bid about $20 a share for the company, Bret Holley, an analyst at Oppenheimer & Co. in New York, said in a Feb. 23 investment note. Holley estimated that Ranexa’s sales will increase 40 percent in 2009, from $67 million in 2008, and could reach $380 million in the U.S. by 2013.

Astellas, in a statement, said CV’s “refusal to negotiate” had left the company with “no alternative but to take our offer directly to CV Therapeutics’ stockholders.”

Possible Rival Bid

The offer raises the possibility of a rival bid for CV Therapeutics, said Derek Taller, an analyst at Benchmark Capital in New York, in a telephone interview. Gilead Sciences Inc. may join the bidding because of its interest in CV’s heart medicines, Taller said. Foster City, California-based Gilead’s cardiovascular product line includes lung disorder treatment Letairis, which generated $113 million in sales for the company in 2008, Taller said.

“I think another bidder comes in,” Taller said.

Gilead spokesman Nathan Kaiser declined to comment “on speculation and rumors of that nature,” in a telephone interview.

Astellas and CV, which have had a product licensing agreement since July 2000, began discussion “regarding potential collaboration agreements” in July 2007, according to CV’s federal filing. Masaki Doi, an Astellas vice president, met with Lange on July 30, 2007, to discuss a proposal “involving a change in control” of CV. Astellas proposed an acquisition of CV in September, which Lange rejected in December 2007, while suggesting “the parties continue their negotiations regarding a collaboration agreement.”

Initial Offer

In a letter to Lange and CV’s directors on Nov. 13, 2008, Masafumi Nogimori, Astellas’ chief executive officer, said his company wanted to acquire CV and “continues to be enthusiastic” about the commercial value of Ranexa. Astellas proposed a purchase price of $16 a share, which represented a 72 percent premium for CV’s shares, which closed that day at $9.32. Astellas made its approach public on Jan. 27.

Lange, who helped found CV Therapeutics, and director Thomas Shenk, a Princeton University professor, are up for re- election this year. The company typically holds its annual shareholder meeting in May or June, and the four other directors’ terms expire in 2010 and 2011.

CV Therapeutics rose 14 cents, or less than 1 percent, to $16.00 at 4 p.m. New York time in Nasdaq Stock Market trading. Astellas rose 50 yen, or 1.5 percent, to close at 3,290 yen in Tokyo.

Available Cash

Astellas said its offer is not subject to financing conditions, noting it had $5.5 billion in liquid assets as of Dec. 31, $2.8 billion in cash and $2.1 billion in marketable securities, according to a letter included in a regulatory filing by CV Therapeutics today.

Astellas also sued CV Therapeutics today, seeking to invalidate the company’s poison-pill takeover defense, the company said in a complaint filed in Delaware Chancery Court. Astellas wants a judge to declare an amendment to CV Therapeutics’ stockholder rights plan unenforceable.

CV Therapeutics’ anti-takeover defenses include severance packages for executives and other employees if there is a change of control in the company, according to a company regulatory filing.

CV Therapeutics said on Feb. 20 that the bid “significantly undervalues” the company. Its advisers are Barclays Plc, Goldman Sachs Group Inc. and Latham & Watkins LLP. John Bluth, a CV Therapeutics spokesman, didn’t return several telephone calls seeking comment.

Astellas is being advised by Lazard Ltd. and Morrison & Foerster LLP. The tender offer expires on March 27.

Astellas is seeking new drugs after its best seller, Prograf, a treatment used in organ transplants, lost U.S. patent protection in April 2008. CV Therapeutics in November won U.S. approval to market Ranexa as an initial treatment for chronic chest pain, broadening its potential use.

To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net; David Olmos in San Francisco at dolmos@bloomberg.net

Last Updated: February 27, 2009 18:56 EST