Here’s the inside account of Gilead's 11-week sprint to its $12B Kite buyout
What started as a casual dalliance between executives at Gilead and Kite in 2015 marked by some occasional flirtation over head-turning technology turned serious early this year, probably at JP Morgan, as two top dealmakers — Gilead’s Andrew Dickinson and Kite’s Helen Kim — decided to see if they should get serious about a union of the two biotechs.
By mid-June the two CEOs, John Milligan and Arie Belldegrun, got into the act. And over the next 11 weeks the overture turned passionate enough for Milligan and Gilead to up their initial offer by about $5 billion.
There was an initial bid, which was stiffly rebuffed. The comeback with a sweetened offer was also rejected, but as the numbers grew larger — so did the interest in a buyout as Gilead turned from a spectator in the final leg of one of the most closely-watched development races in biotech to a jockey in the final stretch.
It’s all spelled out in a new SEC filing that says a lot about how these big deals get done, and the valuations that game-changing technologies like CAR-T are fetching.
In a simplified blow-by-blow, here are the highlights:
Due diligence followed. Sullivan & Cromwell weighed in. Kite execs had a chance to talk about retaining Kite staff. And on August 28, the deal was done at $180 a share, or close to $12 billion in total.
Belldegrun’s share of that is about $600 million based only on his own stock.
There was never a mention of any other bidder or attempt to start a bidding war, as David Hung had done with great effect when he was directing the negotiations with Pfizer over the $14 billion Medivation deal.