Sorry Cephalon, aaiPharma appears to be the company of choice for Cima Labs when it comes to mergers and acquisitions.

Cima has determined that Cephalon’s $372 million unsolicited bid for $26-a-share is inferior to a pending stock-swap deal with aaiPharma worth $360 million.

Cima said that it used a variety of financial measures to determine the value of its shares, and concluded that the new company formed under the aaiPharma deal would provide a greater value than Cima on a stand-alone basis.

The new entity is expected to produce revenues of approximately $410 million in 2004, providing a scale and a critical mass from which to grow. The combined company is expected to have a research and development budget exceeding $30 million.

According to the terms of its merger agreement with aaiPharma, which was announced Aug. 5, Cima cannot engage in discussions regarding any proposal that its board concludes is not superior. Cima is based in Eden Prairie, MN.

The stock deal with aaiPharma, which is based in Wilmington and employs about 40 people in Chapel Hill, would give Cima stockholders 1.3 shares of the combined company for each share.

Cephalon, based West Chester, PA, made its competing bid on Aug. 21. The bid represented a 10 percent premium over Cima’s shares at the time.

In a statement, Cima said the ability of the company to continue to achieve increased future value for its shareholders requires a transformation into a more fully integrated company. The proposed merger with aaiPharma accelerates this development and will provide a greater return to shareholders than the unsolicited cash offer from Cephalon, the company said.

“Our analysis supports our conviction that the proposed merger with aaiPharma will provide greater value to Cima’s shareholders,” Steven Ratoff, Cima’s chairman of the board and interim chief executive officer, said in the statement.


Cima Labs: