Warner Chilcott bidder drops out
Shares in the company were unchanged at £8.64 after the American group, which is headed by private equity firms Bain Capital and Thomas H Lee, threw its weight behind Waren Acquisition, the special purpose company set up by banking giants JP Morgan and Credit Suisse First Boston. Waren’s €2.3 billion offer, which valued Warner Chilcott at £8.62 per share, was recommended by the company’s board to shareholders last week.
Waren told the stock exchange that all of the terms and conditions of the takeover, as originally agreed with the Warner Chilcott board, remained in place and were unchanged. The takeover group is now indirectly controlled by Credit Suisse First Boston subsidiary DLJ Merchant Banking, JP Morgan Partners, Bain Capital and Thomas H Lee. The company said any of the four bodies may choose to sell on all or part of their interests in Waren after the takeover becomes effective.
The announcement came as little surprise to the markets after news emerged last week that talks between the former rivals were in progress. Analysts said at the time that the talks were likely to reduce the number of bidders in the race and increased Waren’s chances of sealing the deal.
The focus will now switch to the other bidder still in the race, a consortium of venture capital companies headed by merchant banking heavy hitter Goldman Sachs. The consortium also includes the Texas Pacific Group, which was founded by Ryanair chairman David Bonderman, Blackstone and Kohlberg Kravis Roberts.
Analysts said the Goldman Sachs team would need to stump up in the region of £8.87 to wrest control of Warner Chilcott, which is based in Craigavon and employs 2,000 people in Britain, Ireland, America and Puerto Rico. But Goldman Sachs faces a significant obstacle from an existing agreement between Waren and the Warner Chilcott board, which allows Waren to match any fresh bid.
Warner Chilcott, the former Galen Holdings, specialises in women’s healthcare and treatments for skin disorders and is recognised as a strong player in the market for oral contraceptives. It announced annual profits of $272 million (€212 million) last week, a 45% increase on the previous year.
