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Carlyle says it will not increase ‘full and fair’ bid for UK pharmaceutical firm Vectura

Written by on 10/08/2021

The battle for British pharmaceutical firm Vectura will not go to auction, after one of the two hopefuls said at the last minute that it would not increase its bid.

US private equity firm Carlyle had made the first move for the Wiltshire-based FTSE 250-listed firm, makes inhaled medicines and devices to treat respiratory illnesses such as asthma.

But late on Tuesday, it said it would not go beyond its most recent offer of £958m, or 155p per share, saying it considered this “full and fair”.

Its rival Philip Morris International (PMI) had offered 165p per share during the weekend, having previously said that such an acquisition would enable it to “expand into products beyond tobacco and nicotine, as part of a natural evolution into a broader healthcare and wellness company”.

Philip Morris and Carlyle had been set to go through an auction process after the takeover regulator stepped in ready to end the bidding stalemate if there was no resolution by Tuesday at 5pm.

News of Philip Morris’s interest in Vectura was met with concern from health experts from both sides of the Atlantic and in Europe.

The presidents of the American Lung Association and the American Thoracic Society said it was “reprehensible”, while the British Lung Foundation said: “It is not acceptable that they would then seek to profit further from treatments for the deadly diseases that tobacco causes.”

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The European Respiratory Society had said: “The tobacco industry is responsible for the suffering and early death of millions of people around the world each year.

“It is extremely unethical for a tobacco company to profit from addicting people to its immensely harmful products, then subsequently seek to further profit from the medicines produced to treat harms caused by its own products.”

PMI has said Vectura would operate as an independent unit, adding that it hopes to generate at least $1bn (£730m) in net revenue from “products beyond tobacco and nicotine” by 2025.

Vectura has not yet announced its next move – it could accept PMI’s higher offer, or it could still go with the lower offer from Carlyle.

Initially Vectura’s board backed the offer Carlyle made in May but, when PMI made its own offer of 150p per share, the board switched its allegiance.

Carlyle made another bid for Vectura last week of 155p per share, resulting in the board switching sides again, saying it might be better positioned under Carlyle’s leadership.

Philip Morris upped its offer to 165p per share during the weekend.

 Sky News

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