* Deadline for final bids is 5 p.m. BST/1600 GMT Aug. 10
* Auctions to begin Aug. 11, Wednesday
* Vectura withdraws support for Carlyle's increased offer
* Philip Morris on Sunday offered 165 pence per share for
Vectura
(Adds details, background)
By Pushkala Aripaka
Aug 9 (Reuters) - The takeover battle for drugmaker Vectura
will enter a rare head-to-head auction process if
private equity group Carlyle and tobacco giant Philip
Morris do not make final bids by Tuesday, according to a
British regulator.
"The auction procedure provides for up to five days of
public bidding," UK's Takeover Panel said in a statement on
Monday, adding that auctioning would begin on Wednesday and
neither party can make a revised proposal after 5:00 PM BST
(1600 GMT) on Aug. 10.
Vectura has been the target of several approaches since May
from the U.S.-based groups, which are eyeing the London-listed
drugmaker's expertise with inhalable formulations and device
designs for respiratory therapies for illnesses such as asthma.
The Takeover Panel's decision comes a day after Philip
Morris raised its offer for Vectura to 165 pence per share after
Carlyle and Vectura agreed to a sweetened, 155 pence proposal
from the private equity group on Friday.
Vectura, whose shares gained 5% by 0958 GMT, separately said
on Monday it was withdrawing its recommendation for Carlyle's
latest offer and that it had no intention yet to recommend
Philip Morris' proposal from Sunday.
The drugmaker, which counts Novartis and GSK among its
customers and is also working on a potential inhaled treatment
for COVID-19, has voiced concerns around Philip Morris'
ownership, saying it might be better positioned under Carlyle.
Only a handful of bidding wars have slipped into an auction
process in recent years. In 2018, Comcast beat Rupert Murdoch's
Twenty-First Century Fox in an auction for pay-television group
Sky.
However, the Vectura saga is the second this year to see an
intervention from the Takeover Panel after G4S in February. But,
a deal for the security firm was finalised without suitors going
head-to-head in an auction.
Takeovers for British companies hit a 14-year high by value
in the first seven months of 2021, driven by relatively cheap
valuations due in part to the pandemic and Brexit.
Morrisons, Britain's fourth-largest supermarket
group, is also a high-profile takeover target, reflecting
private equity's appetite for UK Plc.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by
Subhranshu Sahu, Ramakrishnan M. and Bernadette Baum)
