ProStrakan Group Plc rose the most since 2005 in London trading after closely held pharmaceutical company Norgine BV bought 12.6 percent of the U.K. drugmaker and didn’t rule out the possibility of bidding for the rest.
Norgine “has no current intention to make an offer for ProStrakan” and will continue to consider its options, the Amsterdam-based company said in a statement late yesterday. Before today, ProStrakan, based in Galashiels, Scotland, had sunk 18 percent this year after a manufacturing glitch hurt profit and the chief executive quit.
Norgine, under U.K. takeover law, can’t make a bid for the company for the next six months unless certain events occur, such as someone else taking a stake of more than 20 percent, or ProStrakan receiving an offer or possible offer from another company. Norgine reserves the right to make a bid should any of those things happen, according to its statement.
“We believe this stake represents an ‘option to acquire’ an essentially synergistic European business,” wrote Shawn Manning and Elizabeth Klein, analysts at Singer Capital Markets Ltd., in a note to clients today. The share purchase may serve to inform other ProStrakan shareholders of Norgine’s interest.”
U.S. regulatory approval for ProStrakan’s testosterone replacement gel Fortesta and the Abstral cancer pain treatment may spur further buying, the analysts wrote. Singer Capital reiterated its “buy” rating on ProStrakan, with a target price of 100 pence.
Norgine may have purchased the ProStrakan shares from French drugmaker Sanofi-Aventis SA, the Singer analysts wrote. Norgine paid 95 pence, 34 percent above yesterday’s closing price of 70.75 pence, the analysts said. Jean-Marc Podvin, a spokesman for Paris-based Sanofi, didn’t return a call for comment.
ProStrakan jumped 16.25 pence, or 23 percent, to close at 87 pence at 4:30 p.m. in London trading, giving the company a market value of 176 million pounds ($283 million). The advance was the biggest since the company sold shares in an initial public offering in June 14, 2005. Peter Allen, ProStrakan’s chairman and acting CEO, didn’t return a call seeking comment.
Norgine, founded in 1906, focuses on drugs for gastroenterology and hepatology and had sales of 257 million euros ($357.5 million) last year, according to the company’s website. Peter Stein, Norgine’s chairman and chief executive officer, didn’t immediately return a call seeking comment. Stein is the grand nephew of the company’s founder, Victor Stein.
Movicol, a constipation treatment, is Norgine’s biggest selling product, accounting for more than half of sales.
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