Schering's Board Rejects Merck's $18B Bid

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Schering CEO Hubertus Erlen said the directors supported his rejection of Merck's acquisition attempt, which would create Germany's second-biggest pharmaceutical company.

The board believes the offer worth 77 euros ($91.79) per share, made Sunday, "doesn't correspond to the value of Schering as an independent, successful, highly specialized, research-oriented pharmaceutical company," Erlen said.

The board urged Schering to take "all options independently" to increase the company's value, Erlen said. He didn't elaborate.

Speaking for his management team, Erlen said he wanted to convince shareholders that Schering was well-focused and would succeed on its own, despite its relatively small size.

"We focused early on what we can really do well, and are convinced that we don't need stronger volume to work successfully," he said.

For years, Schering's name has circulated as a potential candidate for a takeover and analysts from Landesbank Rheinland-Pfalz said they don't believe the company would be able to find a better offer to fend off Merck.

"Up until last weekend, nothing has happened. Why would a competitor now want to enter the bidding war when the Berlin-based company was previously available for much less money? Schering is no 'hidden champion' that everyone is dying for," the analysts wrote in a research note.

Merck Chief Executive Michael Roemer told reporters and analysts Monday that the offer presented a 15 percent premium on Schering's closing price at the end of last week.

A Merck spokesman, Walter Huber, said the company didn't plan to raise its bid.

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