Plans for an auction to decide the buyer of respiratory drugmaker Vectura have been scrapped after US private equity firm Carlyle said its 155p per share offer was “full and final”.
Cigarette maker Philip Morris and private equity firm Carlyle both hiked their offers for the business over the weekend, leading the Takeover Panel to take steps the bring an end to the bidding war.
The watchdog had announced plans for an auction should final offers not materialise.
However, this has now been scrapped after Carlyle said it would not try to match Philip Morris’ bid.
“Carlyle Bidco has decided that the financial terms of its offer will not be increased and are now final,” it said in a statement. “As a result, the proposed auction procedures will not be implemented.”
Carlyle had seemed in pole position to take over Vectura after its 155p per share offer was recommended by the firm’s board on Friday.
But after Philip Morris rushed to counter with an 165p per share bid, the board then decided to withdraw their recommendation of Carlyle’s bid.
Today, the Times reported that the New York listed firm had switched its bid from a scheme of arrangement to a takeover, meaning it will only require the approval of 50 per cent of shareholders, not the 75 per cent necessary under the former arrangement.
In a statement, Vectura said it “feels that it is appropriate to withdraw its intention to recommend the Carlyle offer and at this stage not to state an intention to recommend the Philip Morris offer”.
The fresh bid sent shares in the firm, which counts Novartis and GSK among its customers and is also working on a potential inhaled treatment for Covid-19, up 5.0 per cent yesterday.
Today they are trading at 173p, in line with yesterday.
It is the second time this year that the Takeover Panel has threatened an auction to settle a takeover battle.
Back in February it said that a battle for services provider G4S would be concluded in the same manner, but the players involved finalised a deal before the auction could begin.
Such regulated public auctions to decide the ownership of a listed company are rare.
In 2018, broadcaster Sky was bought by Comcast for £30bn, after a behind-closed-doors one-day auction settled on a Saturday.