The biggest take-private buyout of the year has been blocked AstraZeneca (AZ) over concerns that it would lose out to a rival if the company was then sold.
One of the world’s biggest private equity firms, Advent International and GIC, one of the three investment entities that manage Singapore government reserves, offered a 34% premium on the share price for the rare disease company in September 2021 as part of a $7.6bn offer.
While the deal was approved by the Sobi board, it was conditional on 90% of shareholders agreeing. AstraZeneca, which owns 8% of Sobi from an earlier rights deal, reportedly collapsed the deal, which then failed to meet its threshold.
Sobi lost a quarter of its value after news of the failed deal reached the markets, leading Sobi chairman Håkan Björklund to express disappointment. “The Board supported the public offer by Advent and GIC as we believed in the strategic merit of the transaction,” but added that “it is the shareholders who decide this”.
“We have a strong belief in Sobi’s strategy and the opportunities ahead. Sobi’s strategy is clear, and we are confident that the company will continue to focus and deliver on the objectives: invest in haematology, grow in immunology and specialty care, expand globally, and invest in the pipeline,” he said.
While AZ has not commented, reports suggest the company was seeking to buy ‘certain assets’ from the Swedish company that may be linked to its original acquisition of a stake in Sobi. This came about through a 2018 deal that saw Sobi gain the rights to sell AZ’s respiratory drug Synagis in the US.
AZ was concerned that with Sobi in the hands of private equity, these rights could be bought by a rival, it has been suggested.
Synagis prevents serious lower respiratory tract infections caused by the respiratory syncytial virus in infants and young children. Sales had been declining in recent years with the drug bringing in only $96.5m in revenue in the first quarter of 2021.
Mattias Haggblom, an analyst at Swedish bank Handelsbanken, said that its $39bn acquisition of Alexion this summer meant AstraZeneca had too much debt to acquire any of Sobi’s drugs in the near future. He added that there would be pressure for Björklund to resign over the failed deal.