Animal drugmaker Dechra Pharmaceuticals has backed a £4.5bn takeover bid from Swedish investment firm EQT today in what would be one of the biggest take-private deals in London so far this year.
The two firms have been in talks over the tie-up since April but the final offer marks a lower price than initially tabled by EQT after Dechra issued a profit warning in the middle of the talks.
The terms of the deal will pocket each Dechra shareholder 3,875p per share in cash, which represents a premium of about 44 per cent premium to the last closing price before the offer period commenced.
In a statement, EQT said it views Dechra as a “high quality and leading company operating in the attractive animal health pharmaceuticals market”, which is expected to “benefit from numerous long-term growth drivers including positive demographics, increasing pet ownership, medical innovation and greater focus on animal care within the family.”
“The company is led by a high quality and experienced management team, with a clear vision and strategy for the future direction of the business,” it added.
Dechra Chair Elizabeth Alison Platt said it is the board’s view that “accepting this proposal represents the best interests of all stakeholders” and “represents a compelling opportunity for shareholders to realise, in cash and with certainty, Dechra’s potential for future value creation.”
Dechra has grown under the leadership of chief of Ian Page from a UK veterinary wholesale distribution firm and floated on the London Stock Exchange in 2000 with an equity capitalisation of £60m. The firm is now a global veterinary pharma business, ranked seventh globally by revenues, with operations in 26 countries and 2,470 employees.
The take private swoop comes amid a flurry of takeovers in the capital from foreign buyers this year and may fuel further fears of a bargain hunt on London’s markets.