Warner Chilcott confirms higher approach

The battle for Warner Chilcott moved to the next round today when the drugs group confirmed an approach that could value it at more than £1.5bn (€2.15bn).

The Northern Ireland-based company, which changed its name from Galen in May, said the move could lead to an offer valuing its shares at 837p each – higher than the 800p previously indicated.

It also said talks were continuing with two other parties that had expressed interest in putting forward an offer.

Warner Chilcott said there was no certainty that an offer would be made, and that it would make a further announcement as soon as possible.

The confirmation was in response to media reports, which said yesterday that the firm had already received a firm offer from a group led by investment bank Goldman Sachs.

A consortium headed by private equity specialist Bain Capital is also thought to be competing with a rival bid from a group involving the investment arms of Credit Suisse First Boston and JP Morgan.

Warner, which is due to announce its third-quarter results on Wednesday, had already told the market that three parties were examining its books.

The company, based in Craigavon in County 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.

The attraction of Warner to private equity houses is its cash flow and analysts expect the group to be taken private for two to three years before moves are made to return it to the stock market or seek a trade sale.

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

Warner posted a 46% rise in quarterly pre-tax profits last month to $60.5m (£33.5m/€47.3m), boosted by the sale of its UK business for £40m (€57.6m) in May.

Chief executive Roger Boissonneault has said the group is 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.