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SEC Clears Way for Hybritech Vote on Sale

February 19, 1986|GREG JOHNSON | Times Staff Writer

SAN DIEGO — Eli Lilly & Co. said Tuesday that the Securities and Exchange Commission has approved Hybritech's proxy materials, paving the way for a March 18 special meeting of Hybritech shareholders to vote on Lilly's proposed $413-million acquisition of the San Diego-based biotechnology company.

Indianapolis-based Lilly has offered Hybritech shareholders $29 per share, including cash, convertible notes and warrants, for 1.4 million Lilly common shares. If Hybritech shareholders approve the acquisition, they would also receive a contingent payment unit--which would be traded on the American Stock Exchange--that Hybritech has valued at $3.

The documents approved by the SEC "set up valuations on what (the package) is worth," said Irving Katz, an industry analyst with San Diego Securities. "Obviously the market thinks it's worth more (than $32) because Hybritech closed on Tuesday at $32.625."

On Tuesday, Hybritech officials also announced that the company expects a $3-million net loss during the fourth quarter ended Dec. 31, compared to a $377,000 net profit during the same period a year ago. Hybritech reported net income of $1.6 million for the first three quarters. In 1984, following five years of losses, the company reported a $1.1-million net profit.

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