London/berlin: Stada Arzneimittel AG is weighing offers as a bidding war for one of the last remaining generic-drug businesses of its size in Germany and Russia begins to unfold.
The company said on Thursday it received a non-binding offer of €58 euros (Dh226) a share — total value about €3.61 billion — from a third suitor it did not identify. That’s €2 per share more than Cinven Ltd.’ s bid announced earlier this week. Advent International Corp. is also seeking to buy the Bad Vilbel, Germany-based drugmaker.
Advent is planning to raise its offer above Cinven’s bid of €56 a share, people familiar with the matter said on Thursday. The private equity firm may make an offer between €56 and €60 a share as early as next week, said the people. Advent has held discussions with other buyout firms such as Permira about taking on a partner although no final decisions have been made.
Other private equity firms including Bain Capital and CVC Capital Partners are also closely monitoring the situation as they consider whether to bid or team up with others, separate people familiar with the matter said previously. The business may also attract interest from companies including Polpharma SA, the Polish drugmaker, the people had said.
An unusual shareholder structure and entrenched management kept Stada independent for years as erstwhile competitors such as Ratiopharm were bought out by bigger market players. Then last year, activist investor Active Ownership Capital Sarl successfully campaigned to overthrow a rule it said gave Stada’s board undue influence over ownership of the company. Speculation about takeover interest has propelled the German company’s shares up more than 80 per cent in the last 12 months.
Shares gain
The price could climb as high as €63 a share in the context of a bidding war, Thomas Maul, a Frankfurt-based analyst with DZ Bank AG, wrote in a note to investors. However, “fair value” for the company is about €57.50, Maul estimated.
Stada shares on Friday gained to their highest since 1998, rising as much as 2.6 per cent to €57.70, and traded 0.9 per cent higher as of 10.11am in Frankfurt.
Advent oversees $42 billion (Dh154 billion) in assets and has expertise owning generic drugmakers, including investments in Argentina’s Fada Pharma and Romania’s Terapia as well as Colombian speciality pharmaceutical company Grupo Biotoscana.
Stada’s management is in favour of exploring a sale, the people said. The supervisory board may be becoming more open to the idea, although it remains cautious about a takeover, the people said. Executives are likely to seek some job, investment and site guarantees, they said.
The supervisory board established a five-member committee lead by its Chairman Ferdinand Oetker to help executives “protect the interests of the company as efficiently as possible” and ensure a “close exchange of information,” the company said in a separate statement earlier on Thursday.
