Stada opens books to let formal bidding commence

Faced with takeover interest from three private equity firms, Stada has levelled the playing field by opening up its books and starting a structured bidding process.

The three interested parties - confirmed as Cinven, Advent International and Bain Capital - will now all receive the "same level of information" and so have the opportunity to present their takeover proposals to the German company's board on an even footing.

Until now, Advent International - currently the highest bidder for the generic and over-the-counter business with an offer of €58 per share plus a dividend payment for shareholders - had a higher level of scrutiny of Stada's books than its rivals.

Bain and Cinven - which bid €58 and €56 respectively - will now have the opportunity to revise their offers as it seems Advent's bid to close down the race early with its binding offer, due to expire today, will not be successful. Stada says it has set up a data room to allow suitors to carry out "multistage due diligence”.

"In the interest of all shareholders and stakeholders of the company, further potential for value enhancement shall be presented in this process in order to be reflected in possible offer prices," said Stada in a statement.

"Moreover, the value of the strategic concepts of the interested parties as well as their willingness to grant protective mechanisms for stakeholders will also be examined."

With a three-way contest now in play, Stada's board will be able to examine each would-be buyer's plans to grow the business and other factors such as commitments to maintain German facilities and staffing at the 122-year-old company.

As it stands, the bids value Stada at around €3.6bn, roughly in line with its current valuations based on its share price, which is at a record high in the wake of the takeover interest. Stada reported flat sales of €1.5bn in the first nine months of 2016, its most recent financial statement, and has said it wants to boost annual sales to €2.6bn in 2019.

The current takeover battle has been prompted by a shareholder revolt, which accused the company of underperforming relative to its peers in the market and not making sufficient progress in expanding its business internationally.

The rebellion has already led to the resignation of former CEO Hartmut Retzlaff after 23 years at the helm - to be replaced by Matthias Wiedenfels - and the ousting of chairman Martin Abend.