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Stada confirms Cinven as one of two takeover bidders

Private equity group offers €3.6bn for the generics and over-the-counter medicines manufacturer

StadaGermany's Stada confirmed that it has received two offers to buy the company, one of which is from private equity group Cinven.

The Cinven offer is priced at €56 per Stada share, a 15% premium to Stada's closing share ahead of the weekend which values the generic and over-the-counter (OTC) medicines manufacturer at around €3.6bn ($3.8bn).

In a statement, Stada said it is "weighing up its options on how to react in the best interest of the company", adding: "it is not yet possible to foresee whether a takeover offer from Cinven or the other potential bidder will indeed materialise."

Other private equity groups, including Advent, Bain Capital, CVC Capital Partners and Permira, have also been rumoured to have an interest in buying the German company, while Polish generic drug company Polpharma has been put forward in the past as a possible merger candidate.

Stada has been linked to takeover attempts multiple times in recent years, but the latest offers come amid a turbulent period for the company that has seen disgruntled rebel shareholders place management under pressure, saying it is under-performing and needs new governance.

The last few months have seen the resignation long-serving chief executive Hartmut Retzlaff after 23 years in the role to be replaced by Matthias Wiedenfels, seen as being more open to the possibility of selling the business. Retzlaff's departure was swiftly followed by the ousting of chairman Martin Abend at the company's annual general meeting in August to be replaced by Ferdinand Oetker.

The rebel investors - led by Active Ownership Capital which took a stake in the company last year - were able to get one of their three preferred candidates voted onto Stada's board at the AGM last year, former Novartis exec Eric Cornut who had been proposed as a replacement for Abend.

Stada accused AOC at that time of trying to force Stada into a sale, something the shareholder group denied. Regardless, if a sale of Stada does go through it will be seen as a victory for AOC as the value of Stada has nearly doubled in the last 12 months, according to a Financial Times report.

AOC has argued that management at Stada lacks the experience to make the company an international player and had a hierarchical structure that prevented it from modernising.

Article by
Phil Taylor

13th February 2017

From: Sales

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