Icelandic generic drug firm Actavis HF (ACT.IC) Thursday topped the bid from Barr Pharmaceuticals Inc. (BRL) for Croatia's Pliva DD (PLVA.ZG), offering 795 kuna, or $139.4, a share.
Barr on Aug. 18 made a formal offer for Pliva of HRK743 ($1=HRK5.7) a share, which was approved by the Pliva supervisory board Aug. 23.
Actavis also said it now controls a total of 20.8% of Pliva's share capital through a combination of share ownership and options to acquire shares.
The bid from the Icelandic generic drug company values Pliva at about $2.5 billion, compared with Barr's offer, which valued the company at about $2.43 billion.
At 1528 GMT, Actavis shares were up 1.1% to ISK66.10, outperforming a broader higher market.
The Actavis' offer is conditional on the acceptance by more than 50% of Pliva's outstanding issued shares, said Marija Mandic, Pliva's head of investor relations.
Mandic said the Zagreb-based company's supervisory board will give its opinion on the Actavis offer within 10 business days, as required by Croatian market regulations.
Barr Pharmaceuticals and Actavis have been striving to outbid each other since March, when Actavis made its initial unsolicited, tentative offer for the Croatian drug maker, valuing it at $1.6 billion.
Barr said in a statement that it is evaluating the Actavis bid and will issue a response no later than Sept. 8.
Barr's tender period will close 30 days after the publication of Actavis' bid.
The revised offer represents an increase of 10% over Actavis' previous offer of HRK723 a share.
Actavis spokesman Halldor Kristmannsson told Dow Jones Newswires that he thinks the latest price offered was fair and already in the high end.
"It is a very stretched price," he said.
This was reiterated by Actavis' chief executive, Robert Wessman, who also said: "You need to see very good synergies to be able to offer this price."
However, Wessman said he was confident that the potential synergies for Actavis puts it in a good position of winning the bidding battle.
"Barr should be more restricted than us, unless they want to overpay for the asset," he said.
Glitnir analyst Jonas Fridthjofsson said it wouldn't be a surprise if Barr tried to outbid Actavis' offer again.
He said he expects the bidding to continue up to around HRK850 a share, but doesn't expect Actavis to go much higher than that.
"Actavis has more to gain in potential synergies from a merger," he said, but added that Barr is eager to get into the European market.
"Maybe they will be prepared to pay a lot for that," he said.
Actavis said it believes that the merger with Pliva could generate synergies of at least EUR50 million in 2007 and EUR100 million per year after that.
CEO Wessman said in a statement: "Our increased offer underlines our commitment to bringing Pliva into the Actavis Group. We believe very strongly that the combination of our two businesses will create one of the most exciting companies in our industry and a solid platform from which to achieve substantial future growth."
The battle over the Croatian-based Pliva is the latest and the most drawn-out example of the quest by many a Western pharmaceutical company to remain competitive by moving production to cheaper locations.
Central European generics makers currently offer the right mix of low labor costs and proximity to both developed Western European and booming Eastern European markets such as Russia.
Per capita expenditure on drugs in countries like Russia is well below Western Europe's levels but is rising.
As well as its production operations in Croatia, Pliva also has production facilities in the Czech Republic and Poland. While Pliva's Polish operations are centered on generics drug production, its Czech unit focuses on the production of treatments for oncology diseases. Pliva is also a key producer of veterinary treatments in Croatia.
No comments:
Post a Comment