(Alliance News) - Philip Morris International Inc on Tuesday said it has switched its bid for Vectura Group PLC to a takeover offer from a scheme of arrangement.
The New York-based tobacco firm said the move will "increase the certainty of its execution".
Philip Morris noted its takeover offer for the asthma treatment firm now has the consent of the UK Takeover Panel and the offer is conditional on more than 50% acceptances. No other changes have been made to the takeover offer ahead of a Panel-set auction which will start on Wednesday and run for five days, ending on Tuesday next week.
The battle to acquire Vectura has been rumbling on for months, with the Marlboro cigarette maker and private equity firm Carlyle Group both set to take part in Wednesday's auction.
Vectura was valued at GBP1.02 billion in Philip Morris' most recent offer on Monday, having increased its bid to 165 pence per share, from its 150p a share offer made in July, and besting Carlyle's 155p offer made on Friday. In May, Carlyle offered 136p per Vectura share.
Vectura shares were trading 0.4% higher at 173.64p on Tuesday morning in London. Philip Morris shares were flat on Monday's close in New York at USD99.20 each.
Vectura makes inhaled medicines, including the Flutiform asthma drug, and drug-delivery devices. Since 2019, it has been moving towards a contract business model in which it supplies services to pharmaceutical firms, rather than developing its own drugs.
The acquisition of Vectura comes as part of Philip Morris's new strategy to diversify into what it calls "beyond nicotine" products, with Philip Morris Chief Executive Jacek Olczak saying last month that Marlboro cigarettes "will disappear" from UK shelves over the next 10 years.
Regulatory fears have long clouded the tobacco industry. In April, the Wall Street Journal reported US President Joe Biden was mulling cutting the amount of nicotine allowed in cigarettes. The WSJ explained the cut would leave the amount of nicotine in cigarettes at levels which are no longer addictive.
In July, Philip Morris bought pharmaceutical firm Fertin Pharma AS for an enterprise value of USD820 million.
Rival British American Tobacco PLC is also looking to shake its association with conventional smoking products as the cigarette maker shifts its focus towards its New Categories division. The division boasts three product offerings: vapour products under the Vuse brand; oral products under Velo; and tobacco heating products under Glo.
By Will Paige; willpaige@alliancenews.com
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