McKesson, Elliott Said in Talks on Celesio Stalemate

McKesson Corp. (MCK) and hedge fund Elliott Management Corp. are discussing options including a possible increase in McKesson’s offer for drug distributor Celesio AG to break a stalemate on the deal, three people familiar with the matter said.

No final decision has been made and the talks may not lead to an agreement on the 3.9 billion-euro ($5.3 billion) offer, though, said the people, who asked not to be identified because the process is confidential.

McKesson, based in San Francisco, said Oct. 24 it agreed to buy the 50.01 percent stake in Celesio held by Franz Haniel & Cie GmbH, a family-owned investment company, for 23 euros a share, and begin a tender offer for the remaining publicly traded shares at the same price. McKesson’s offer is conditional on support from stockholders representing 75 percent of Stuttgart, Germany-based Celesio’s stock.

Elliott, the U.S. hedge fund run by Paul Singer, said Dec. 10 the offer undervalues Celesio and the firm won’t tender its shares. Elliott holds more than 25 percent of the voting rights in Celesio.

Shareholders have until midnight Frankfurt time tomorrow to tender stock in the offer.

Celesio rose 4.5 percent to 23.43 euros at 2 p.m. in Frankfurt. McKesson yesterday rose 1 percent at $161.83. Reuters reported the talks earlier today.

For Related News and Information: Elliott Won’t Tender Shares to McKesson Offer for Celesio (4)

To contact the reporters on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net; Aaron Kirchfeld in London at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net; Aaron Kirchfeld at akirchfeld@bloomberg.net

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