The protracted acquisition of U.S. eye care company Alcon, Inc., by Swiss pharmaceuticals giant Novartis AG was a classic corporate thriller. Early on it looked like a straightforward transaction, but it quickly turned hostile when Novartis sought to buy out minority shareholders with what was seen as an undervalued offer. Thanks to fluctuations in share price and exchange rates, the effective value of Novartis’s share-swap dropped as low as $125 per share—far below the $168 per share it had agreed to pay food conglomerate Nestlé S.A. for 77 percent of Alcon.
“The offer was grossly inadequate,” says Sullivan & Cromwell’s Keith Pagnani, who stepped in to represent Alcon’s independent directors committee due to a conflict with its usual counsel, Cravath, Swaine & Moore, which was representing Nestlé.
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