12th Aug 2021 17:53
(Alliance News) - Vectura Group PLC on Thursday backed Philip Morris International Inc's takeover bid, despite concern about the ethics of the asthma treatment firm coming under the marquee of the tobacco company.
On Tuesday, private equity firm Carlyle Group decided against raising its takeover offer for the FTSE 250 firm, meaning a proposed auction was cancelled.
As a result, it meant the Marlboro maker's takeover offer of 165 pence per share, which values Vectura at GBP1.02 billion, remained the highest bid.
Vectura shares closed flat at 163.20p each in London on Thursday in London, valuing the company at GBP977.0 million. Philip Morris was trading marginally lower at USD99.74 in New York.
Vectura on Thursday said it was advised that the 165p offer is "fair and reasonable" and as a result, its directors "intend to unanimously recommend" it.
Last week Friday, buyout firm Carlyle offered 155p per Vectura share, an offer which at the time, bested PMI's previous 150p tilt.
Vectura last week backed Carlyle's raised offer. When setting out its recommendation for the private equity firm's bid, Vectura said it "may be better positioned under Carlyle ownership to meet both the company's existing strategy, and the interests of a number of its current stakeholders".
On Tuesday, when Carlyle announced it would not raise the stakes in response to the 165p offer from Philip Morris, it also hinted that while its bid may be lower it could prove a more popular owner of the inhaled medicines firm.
"In the August 6 announcement, the Vectura directors also noted the reported uncertainties relating to the impact on Vectura's wider stakeholders arising as a result of the possibility of the company being owned by PMI," Carlyle said on Tuesday.
Vectura makes inhaled treatments, including the Flutiform asthma drug, and drug-delivery devices. Since 2019, it has been moving towards a contract business model in which it supplies services to pharmaceutical firms, rather than developing its own drugs.
The intended acquisition of Vectura comes as part of Philip Morris' new strategy to diversify into what it calls "beyond nicotine" products, with Chief Executive Jacek Olczak saying last month that Marlboro cigarettes "will disappear" from UK shelves over the next 10 years.
In July, Philip Morris bought pharmaceutical firm Fertin Pharma AS for an enterprise value of USD820 million.
On Tuesday, Philip Morris switched its bid for Vectura to a takeover offer from a scheme of arrangement.
Earlier in August, the British Thoracic Society a UK charity focused on the treatment of those with lung disease, hit out at the Philip Morris and Vectura deal.
"BTS aligns with lung and cancer charities and medical societies in the UK as well as with our counterpart in the United States, the American Thoracic Society, in highlighting the inappropriateness of this deal and calling for this takeover to be prevented, given the unresolvable ethical conflict that would be generated by such an arrangement," the BTS said.
By Eric Cunha; [email protected]
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