STADA activist Wyser-Pratte describes Cinven offer as 'lowball', sees EUR 65 as possible
STADA Arzneimittel [ETR:SAZ] should attract a higher offer than Cinven Partners’ EUR 56-per-share approach, according to activist and minority shareholder Guy Wyser-Pratte.
“It’s a lowball offer,” Wyser-Pratte told this news service. It was likely a lowball bid made to “smoke out” any other bidders rather than a full and final offer, he added.
He has previously said CVC Capital Partners was interested in buying STADA.
Wyser-Pratte, who will only say his stake is below the 3% disclosure threshold, speculated that a private equity player such as Cinven could pay around EUR 65 per share “quite easily”.
STADA has now disclosed that both Cinven and Advent International have approached with “legally non-binding expressions of interest regarding a bid for the acquisition of up to 100%” of the company, according to a statement.
The company is weighing its options and has started open-minded talks with the bidders, it said.
Cinven and Advent already have their own generic pharmaceutical sector portfolio companies that could benefit from cross-fertilisation and cost-cutting post-acquisition, Wyser-Pratte said.
Cinven acquired two companies in 2012 -- Mercury Pharma and Amdipharm. In December 2012, the two companies were merged to create AMCo. Among Advent’s generics portfolio companies are Terapia in Romania and Alcala Farma in Spain.
Strategic buyers could also put their hat in the ring, he said, echoing comments he has made since joining the pack of activists demanding change at the German pharmaceutical group last year.
A strategic buyer could pay even more given the opportunities for synergies, he said.
Commenting on press reports that Novartis [VTX:NOVN] and Mylan Labs were interested, he said either would be “a good fit”.
Active Ownership Capital largely ceased its activist campaign after it successfully urged board changes at STADA’s 2016 AGM, but Wyser-Pratte has constantly argued for a sale.
Another German activist fund, Shareholder Value Management, also backed AOC’s call for board change but has not openly pushed for a sale.
Despite STADA's share price increasing around 40% between when AOC first disclosed its stake in early April 2016 to 10 February, Wyser-Pratte said he believes the company's value is still not where it should be.
He told this news service last July that a board shake-up could lead to an organic market value increase to between EUR 60-EUR 70 per share, and could also open the company up to acquirers.
Speaking to this news service prior to the announcement of the Cinven/Advent bids, Wyser-Pratte said the company had been mismanaged and needs to be sold to a larger player or a private equity player.
“You need to take a broom and clean up the excess and sell them to a larger company,” he said in January.
As reported, other minority shareholders spoken to by this news service have been happy to back the new board and its mid-term strategy, but also wished for a sale to be “on the table” as an option.
STADA declined to comment further than the statement they issued earlier today. Active Ownership Capital declined to comment.