(Alliance News) - Vectura Group PLC on Monday noted Philip Morris International Inc's increased offer, which values the asthma treatment firm at over GBP1 billion, and subsequently withdrew its backing for Carlyle's bid made on Friday.
However, Vectura decided not to back Philip Morris's new offer and instead an auction was set by the UK Takeover Panel, the regulatory body which deals with takeovers and mergers. This will start on Wednesday and run for five days, ending on Tuesday next week.
Vectura, Philip Morris and Carlyle have all agreed to the auction, the Takeover Panel said.
Earlier Monday, Philip Morris confirmed that it had upped its bid for Vectura to 165 pence per share, as the Marlboro cigarette maker goes head-to-head in a bidding war with private equity firm Carlyle.
New York-based Philip Morris was bested on Friday by Carlyle after the private equity firm increased its offer for FTSE 250-listed Vectura to 155p per share, beating Philip Morris's 150p a share offer made in July. Carlyle itself had previously offered 136p per Vectura share in May.
Philip Morris's new offer of 165p per Vectura share values the company at GBP1.02 billion.
Vectura shares were trading 4.8% higher at 171.93p on Monday morning in London, and are up 12% from last Thursday's closing price of 153.80p, before the fresh wave of bidding began on Friday morning.
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 Greg Roxburgh; gregroxburgh@alliancenews.com
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