Barr Raises Pliva Bid to $2.3 Bln, Beating Actavis
June 30 (Bloomberg) -- Barr Pharmaceuticals Inc. raised its offer for Pliva d.d. to $2.3 billion in cash to trump Actavis Group hf in the largest takeover of an eastern European drugmaker.
Pliva investors will get 755 kuna a share, or about $26.15 for each global depositary receipt, Woodcliff Lake, New Jersey- based Barr said in a PRNewswire statement today. Actavis offered 735 kuna a share yesterday, and said it already owns more than 20 percent of Zagreb, Croatia-based Pliva.
The acquisition would give Barr, the largest U.S. maker of birth control pills, access to Pliva's European markets, where Barr currently has little presence. Actavis says it will fold much of Pliva's European operations into its own. The winning bidder will become the third-biggest company in the world generic-drug market, which may reach $100 billion by 2010.
``Barr means more independence for Pliva, at least in the European markets,'' said analyst Hrvoje Stojic at Hypo-Alpe-Adria Bank in Zagreb. ``Actavis will want to take more control.''
For that reason, Actavis may have a tough time persuading the Croatian government, which holds about 18 percent of Pliva through pension and privatization funds, to sell, Stojic said.
``I think they will continue to show their resistance,'' he said. ``They're more for Barr.''
Reykjavik-based Actavis used private purchases and call- option agreements to build up a stake in Pliva after the Croatian company's management endorsed Barr's bid June 27, Actavis Chief Executive Officer Robert Wessman said. U.S. takeover law prohibits Barr from making private purchases of Pliva stock.
Actavis spokesman Halldor Kristmannsson said company executives are examining Barr's counterbid and will comment later today. Actavis touched off bidding for Pliva with a 570 kuna-per- share offer in March, later raising the offer to 630 kuna. Pliva's management said the offer was too low, and opened up the bidding to other companies.
Pliva spokeswoman Marija Mandic couldn't be reached for comment.
Barr is paying about 2 times Pliva's revenue, compared with the 4.2 times that Sanofi-Aventis SA paid in March when it bought 24.9 percent of Czech generic-drug maker Zentiva NV.
Pliva was founded in 1921 and now has operations in more than 30 countries. About 1,400 of Pliva's 6,000 employees are involved in sales and marketing, compared with 350 of Barr's 2,000 workers.
Barr gets about two-thirds of its sales from generic medicines, including the widely used blood thinner warfarin. The company sells the Plan B ``morning-after'' emergency contraceptive as well as the Seasonale birth-control pill that works by making women menstruate only four times a year.
Barr, with 50 generic drugs in development, will also gain the 120 that Pliva has in the works, and the capacity to expand into copies of genetically engineered medicines. The companies began cooperating last year on a copycat version of Amgen Inc.'s Neupogen, a white blood-cell stimulator used to treat cancer patients.
Actavis says it's currently working on more than 300 products, and the addition of Pliva's drugs would create ``one of the strongest pipelines in the industry,'' the company said in a statement yesterday. Actavis's Wessman said he wants to create a company that will be able to take on the generic-drug industry leaders, Israel's Teva Pharmaceutical Industries Ltd. and Switzerland's Novartis AG.
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Last Updated: June 30, 2006 04:49 EDT
Is there anybody in Croatia who can answer these questions?
1. Why is Pliva being sold?
2. Where is that money going?
3. When Strategic industries are being sold, what is left of autonomy?