It appears that Amylin Pharmaceuticals (Nasdaq:AMLN) is finally getting ready to cave on the notion of putting itself up for sale. Several media outlets reported Sunday evening that the company has hired Credit Suisse and Goldman Sachs to seek potential offers for the company. The move is probably in the best interest of shareholders and should not come as a major surprise as the writing of a sale has been on the wall for some time now.

SEE: Corporate Takeover Defense: A Shareholder's Perspective.

Coveted Target
It was reported that in February, the company rejected a $3.5 billion offer from Bristol-Myers Squibb (NYSE:BMY) which equated to about $22 per share. At the time, such an amount would have been an ample premium for a stock that never broke above $15 during the month of January. Amylin has also been feeling the heat from Carl Icahn, the company's third largest shareholder, who has been pushing for a sale.

Amylin does wield a coveted portfolio of existing drugs and drugs in its pipeline. Earlier this year, the Food and Drug Administration approved Bydureon, the first once a week treatment for type 2 diabetes that Amylin had worked with Alkermes (Nasdaq:ALKS) to develop. The company has been looking for a partner to help market the drug to customers outside of the United States since it ended its collaboration agreement with Eli Lilly (NYSE:LLY) late last year.

The rapid increase in the U.S. of type 2 diabetes over the past few decades has given Bydureon a great deal of upside potential. Among the companies that have already been mentioned as potential suitors for Amylin are Sanofi (NYSE:SNY), Merck (NYSE:MRK) and AstraZeneca (NYSE:AZN).

SEE: Evaluating Pharmaceutical Companies.

The Bottom Line
At the end of the day, this sale should turn out to be a win-win situation for Amylin and its shareholders. The market had been anticipating a deal and it looks like the company is finally coming around to the realization that a takeover may be for its benefit. It will be interesting to see who emerges as the leading candidate for the purchase. In the meantime, it is positive development for shareholders that the potential for a sale is out there in the media so that potential suitors can bid up the price. See Analyzing an Acquisition Announcement.

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At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.
Tickers in this Article: AMLN, BMY, ALKS, AZN

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