Cerberus, Tribeca, May See Talecris Exit Blocked

(Reuters) – U.S. Federal Trade Commission officials are opposed to Australian biotech firm CSL Ltd’s (CSL.AX) planned $3.1 billion purchase of smaller U.S. rival Talecris Biotherapeutics Holdings Corp, CSL said on Monday.

CSL said commission staff had recommended the agency’s commissioners take legal action to block the deal, which is aimed at boosting CSL’s presence in the fast-growing biopharmaceutical industry.

A final decision from the commissioners is likely to be announced on May 28, the Australian company added.

Talecris is owned by private equity groups Cerberus Partners and Tribeca Investment Partners.

CSL raised A$1.9 billion ($1.5 billion) with a share sale last August to help pay for the takeover, and said at the time if it ended up with extra capital it would consider returning it to shareholders.

“That’s what investors will be wanting,” said Amanda Munro, an investment analyst with Fortis Investment Partners.

She said she could not see any other obvious takeover candidates for CSL, if the Talecris deal fell through, and said returning the funds to shareholders would help remove uncertainty which had hung over the stock since last August.

Analysts said it would be disappointing if the commission rejected CSL’s offer of remedies to rescue the deal.

But Munro and UBS analyst Andrew Goodsall said CSL still had growth options with its own products.

“It’s a great stock standalone, especially in the low A$30’s, Munro said. “But if the deal went through you’re looking at a A$40-plus valuation pretty quickly.”

CSL shares closed last Friday at A$30.89 each. ($1=1.277 Australian Dollar) (Reporting by Sonali Paul; Editing by Mark Bendeich)