Novartis’ Bid for Chiron Is Low, Lawsuit Says

Novartis’ proposed $4.5-billion buyout of Chiron Corp. undervalues the U.S. vaccine producer, Chiron shareholders said in a lawsuit filed against company directors.

Novartis of Switzerland, the world’s fourth-largest drug maker, offered $40 a share for the 58% of Chiron it doesn’t already own, about a 10% premium at the time, Emeryville, Calif.-based Chiron said Thursday.

The acquisition would give Novartis access to a potential $10.4-billion vaccine market by 2007, Lehman Bros. analysts said. Chiron said it received a favorable ruling from U.S. regulators, moving it a step closer toward resuming production of Fluvirin in Britain for the next influenza season.

Shares of Chiron fell 14 cents to $42.79. Novartis’ U.S. shares fell 9 cents to $49.10.