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Blood products and vaccines stgeloper CSL Ltd has terminated its planned takeover of US-based plasma therapeutics firm Talecris Biotherapeutics Inc, and will conduct a share buyback with the money it raised to fund the deal.

CSL and Talecris agreed to terminate the $US3.1 billion ($A3.87 billion) takeover proposal because the US Federal Trade Commission was going to block it, the Melbourne-based company said in a statement on Tuesday.

CSL plans to buy back up to 54.9 million shares on market, or about nine per cent of its shares on issue.

The company said it will spend about $A1.59 billion on the buyback, based on last Friday’s closing price of $28.98.

“Last year, investors supported CSL with its Talecris acquisition plan by participating in the equity raising,” chief executive Brian McNamee said in the statement.

“Given the company will no longer be acquiring Talecris we think it appropriate for funds to be returned to shareholders.”

The shares will be purchased on-market over 12 months beginning on June 23.

Dr McNamee said the risks and costs associated with legal action against the US Federal Trade Commission (FTC) were too great.

“We are disappointed that the FTC resolved to block the transaction,” Dr McNamee said.

“CSL’s board of directors did not believe that entering into a protracted litigation process with the FTC … would be in the best interests of our stakeholders.”

CSL will pay Talecris a $US75 million ($A93.54 million) break fee, while contracts between the two companies would remain in effect, including a plasma supply deal announced in association with the Talecris bid.

“CSL remains a well-positioned global biopharmaceutical business and will continue to expand on its core strengths,” Dr McNamee said.

“We have consistently produced year-on-year growth for our shareholders and we are confident in the continued value and growth potential of our stand-alone business.”

 

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