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Last Updated: Monday, 3 April 2006, 20:05 GMT 21:05 UK
Novartis increases Chiron offer
Laboratory testing
Novartis hopes the new offer will be more acceptable to Chiron investors
Swiss drug firm Novartis has raised the price it is offering for the shares it does not own in US vaccine firm Chiron in order to speed through a deal.

The group has increased its offer to $48 (27) per share from the $45 bid it had tabled in October last year.

The new $5.3bn bid has won approval from Chiron's independent directors.

Novartis currently owns 42.2% of Chiron and hopes to make up ground on larger rivals such as GlaxoSmithKline once it takes control of the group.

The enhanced bid has also won the approval of some of the group's biggest shareholders who had originally opposed the takeover.

CAM North America and ValueAct California - groups that had previously criticised the tie-up - have now given their blessing to the Novartis offer.

Improved terms

Chiron's shareholders will now vote on whether to accept the improved offer on 19 April.

As the two sides have already gained the necessary regulatory approval, Chiron said it expected the merger to go through soon after the investor vote.

"Novartis agreed to the amended terms as rapid closure of the transaction is in the best interest of public health as well as Chiron employees," the Swiss firm said in a statement.

The move also "avoids the potential of value destruction for all Chiron shareholders that would have resulted from a failed transaction," it added.

Novartis has been spending heavily in an effort to improve its position among world drugmakers - it is currently the sixth largest.

It is also looking for new drugs to boost its product line.

Chiron is the world's number five vaccine producer and recently landed a $62m (35.6m) contract to produce a vaccine against the human form of the bird flu virus.

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