The auction of Vectura, a drug company, is in major dilemma after private equity firm The Carlyle Group (CG) decided not to raise its bid on the eve of the event. The company is valued at more than $1 billion by the Takeover Panel. The 5-day auction was supposed to happen between August 11 to August 17.
Carlyle has stated that their bid of $0.155 per share is the final one. While Philip Morris International (PM), the other bidder for the company, is willing to pay $0.165-a-share for the company, the stark contrast between the two company profiles is raising outbursts. The PMI bid will value Vectura at $1.4 billion, while Carlyle is offering to pay up to $1.3 billion.
Carlyle said to the investors of Vectura that it “encourages shareholders to consider the broader context and the impact of each offer on the company and its wider stakeholders in determining which offer to support.”
Vectura is known for their collection of drugs that treat smoking-related diseases and PMI is the parent of famous cigarette company Marlboro.
The situation has brought the leaders of Vectura, chaired by Bruno Angelici, in a great dichotomy. Angelici was with famous drugmaker AstraZeneca for 20 years.
Carlyle’s MD, Simon Dingemans said, “Carlyle believes its offer is in the best interests of the business and its stakeholders, including its employees, partners and customers, as well as, most importantly, the patients it serves and helps to provide with effective and accessible medicines.”
Vectura, if it accepts the ‘Marlboro Man’ deal, will face serious backlash from the investors as well as the pharmaceutical industry. The entire situation has become chaotic and the company leadership is struggling to refer a name to the stakeholders.
PMI has put forward the narrative that Carlyle is looking for short term goals in their statement made on Sunday. It said, “(the company’s) “business model and strategy is driven by a long-term commitment to the transformation of its business and not a search for short term gains and efficiency”. PMI has claimed to go beyond tobacco and has added that it has spent $8 billion to build a research and development facility for preclinical/toxicology, clinical testing, behavioral science and post-marketing studies.
PMI has recently acquired OtiTopic recently, a company that produces inhalable Acetylsalicylic acid, a treatment for myocardial infarction. The drug is in its late-stage and if approved, it will be useful for more than 80 million people in the US alone. The acquisition is a part of PMI’s Beyond Nicotine program and strengthens their case for the Vectura acquisition.
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