(Alliance News) - Clayton Dubilier & Rice LLC on Friday said it is considering raising its takeover offer for UDG Healthcare PLC to GBP2.76 billion from GBP2.61 billion, after at least one major shareholder had said the bid was too low.
The 1,080 pence-per-share bid, up from the previous offer of 1,023p per share, will be the final offer if formally submitted. The private equity firm is in further talks with shareholders to win their backing before making a formal offer.
Shares in FTSE 250-listed UDG were up 1.2% to 1,058.00p in London on Friday morning.
The first bid, announced on May 12, had been criticised for being too low. Allianz Global Investors, which has an 8.6% stake, said the first approach was "opportunistic and significantly undervalues DG and its prospects." UDG has a strong balance sheet and can realise the potential of recent acquisitions, Allianz added.
UDG is one of many mid-cap stocks being circled US private equity, leaving investors wondering whether they're undervalued. St Modwen Properties PLC announced an increased bid of GBP1.27 billion from Blackstone on Thursday. Wm Morrison Supermarkets PLC rejected an GBP8.7 billion proposal from CD&R last weekend.
The 1,080p-per-share bid for UDG is a 28% premium to the closing price of 842p on May 11.
The UDG board, which accepted the earlier bid, has indicated it will recommend the higher offer, CD&R said.
Dublin-based UDG provides services including marketing, packaging and managing clinical trials to drugmakers. CD&R in May said it will combine UDG's Ashfield business with its own Huntsworth unit to create a global pharmaceutical services provider.
By Ivan Edwards; ivanedwards@alliancenews.com
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