CSL’s $3.1 Billion Talecris Purchase May Be Blocked

By Simeon Bennett and Madelene Pearson

May 25 (Bloomberg) -- CSL Ltd.’s $3.1 billion takeover of Talecris Biotherapeutics Holdings Corp. may be blocked by the U.S. antitrust regulator, spoiling its bid to become the world’s biggest maker of treatments derived from blood plasma.

Federal Trade Commission officials in Washington advised the authority to take legal action in the U.S. District Court to block the deal, Melbourne-based CSL said in a statement today. The company won’t decide whether to contest the case until the FTC commissioners’ decision is known by May 28, CSL said.

CSL shares fell to a two-month low after the announcement, which UBS AG said “effectively” ends the deal. Failing to buy Research Triangle Park, North Carolina-based Talecris would scupper CSL’s bid to overtake Baxter International Inc. as the leader in the $15 billion global market for medical treatments derived from blood plasma.

“A CSL legal challenge to the FTC has the potential to drag out,” Andrew Goodsall and Dan Hurren, UBS health-care analysts in Sydney, wrote in a note today. The FTC is unlikely to go against its officials’ advice, “effectively ending the deal,” wrote the analysts, who kept their “buy” rating on the stock.

CSL fell 1.8 percent to close at A$30.35 in Sydney trading, the lowest since March 24. The stock has declined 22 percent since the proposed takeover was announced Aug. 13, compared with a 26 percent slide in the benchmark S&P/ASX 200 Index.

The FTC doesn’t have the legal power to block the deal. Should its commissioners oppose the takeover, it must convince a judge to rule against it.

‘Good Case’

“We still believe that we have a good case and that our arguments are valid,” Rachel David, a spokeswoman for CSL, said by phone.

“It’s a difficult environment globally in a niche market,” David said. “We’d need to see the detail of their recommendations.”

Under the terms of CSL’s offer, it may have to pay $75 million to Talecris’s owners, Cerberus Partners LP and Ampersand Ventures, if the deal isn’t completed. Chief Executive Officer Brian McNamee may use money raised for the purchase to make another acquisition or to buy back stock, said analysts including UBS’s Goodsall and Royal Bank of Scotland Group Plc’s David Stanton.

“I’ve always thought that McNamee is trying to turn CSL into a cash-cow plasma business funding biotech development,” Stanton said by phone. “He might go out and buy something in biotech land. Do I know when that’s going to happen, do I know what it is? No.” Stanton maintained his “buy” rating on the stock.

Plasma is the watery liquid in which blood cells are suspended that CSL gets from its network of blood collection centers. Doctors are increasingly using plasma-based products such as CSL’s Privigen and Talecris’s Gamunex to treat diseases in which immune cells attack the nervous system, including multiple sclerosis and Guillain-Barre syndrome.

To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net; Madelene Pearson in Melbourne on mpearson1@bloomberg.net