Warner Chilcott confirms second approach

A £1.5bn (€2.2bn) bidding war for Warner Chilcott loomed today after the Northern Ireland-based pharmaceuticals group revealed a second takeover approach.

A £1.5bn (€2.2bn) bidding war for Warner Chilcott loomed today after the Northern Ireland-based pharmaceuticals group revealed a second takeover approach.

Shares in Warner, which changed its name from Galen in May, rose 4% in London and 1.96% in Dublin on news that it had agreed to let the unnamed suitor examine its books.

A confidentiality agreement has already been sealed with a consortium of private equity houses ahead of a possible bid worth 800p a share.

A statement from Warner Chilcott today stressed that both enquiries remained “preliminary in nature” and there was no certainty of any formal bids.

The company, based in Craigavon in Co Armagh, specialises in female healthcare and dermatology products. It employs 120 staff in the UK and Ireland, 510 in the United States and 300 in Puerto Rico.

Bosses last year held talks with a potential buyer – thought to be US drugs group Barr Laboratories – but the discussions came to nothing.

Dr Jonathan Senior, an analyst with Evolution Securities, said it was unlikely that Barr or another pharmaceuticals group would be behind the latest approach.

“We are talking about a fairly low-tech company with nothing in its pipeline that you would get excited about and no big blockbuster drugs lurking,” he said.

The attraction of Warner was its cash flow and private equity houses could be expected to manage the company for two to three years before re-floating it or opting for a trade sale, Dr Senior added.

Warner posted a 46% rise in quarterly pre-tax profits last month to $60.5m (£33.5m/€48.8m), boosted by the sale of its UK business for £40 million in May.

Chief executive Roger Boissonneault recently said the group was now fully focused on its US operations.

The group counts contraceptives Ovcon and Estrostep among its brands. as well as combination hormone therapy treatment femhrt and Sarafem, a treatment for severe pre-menstrual syndrome.

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