Advent Plans to Raise Stada Offer Over 3.48 Billion Euros

  • Latest bidder offered 58 euros a share; not identified
  • Stada already was in discussions with Cinven and Advent

Stada Arzneimittel AG is weighing offers as a bidding war for one of the last remaining generic-drug businesses of its size in Germany and Russia begins to unfold.

The company said Thursday it received interest from a third firm that made a non-binding offer of 58 euros a share, or about 3.61 billion euros ($3.84 billion). That bidder is Bain Capital, people familiar with the matter said. Manager Magazin first reported the name.

The offer is two euros per share more than Cinven Ltd.’s bid announced earlier this week. Advent International Corp. is also interested in the Bad Vilbel, Germany-based drugmaker, and may make an offer between 56 euros and 60 euros a share as early as next week, people said. Singapore sovereign wealth fund GIC Pte has joined Advent as a co-investor, separate people said Friday, asking not to be identified because the deliberations are private.

Representatives for Bain and Advent declined to comment, while Stada and GIC didn’t immediately respond.

Other private equity firms including CVC Capital Partners and Permira are closely monitoring the situation as they consider whether to bid individually or team up, people familiar with the plans had said. The business may also attract interest from drugmakers including Poland’s Polpharma SA, they said.

Shareholder Structure

An unusual shareholder structure and entrenched management kept Stada independent for years as erstwhile competitors such as Ratiopharm were bought out by bigger market players. Then last year, activist investor Active Ownership Capital Sarl successfully campaigned to overthrow a rule it said gave Stada’s board undue influence over ownership of the company. Speculation about takeover interest has propelled the German company’s shares up more than 80 percent in the last 12 months.

The price could climb as high as 63 euros a share in the context of a bidding war, Thomas Maul, a Frankfurt-based analyst with DZ Bank AG, wrote in a note to investors. However, “fair value” for the company is about 57.50 euros, Maul estimated.

Stada shares rose to the highest level since 1998 on Friday, climbing as much as 2.6 percent. The stock was 1.9 percent higher at 57.30 euros as of 2:38 p.m. in Frankfurt.

Advent oversees $42 billion in assets and has expertise owning generic drugmakers, including investments in Argentina’s Fada Pharma and Romania’s Terapia as well as Colombian specialty pharmaceutical company Grupo Biotoscana.

Stada’s management is in favor of exploring a sale, the people said. The supervisory board may be becoming more open to the idea, though it remains cautious about a takeover, the people said. Executives are likely to seek some job, investment and site guarantees, they said.

The supervisory board established a five-member committee lead by its Chairman Ferdinand Oetker to help executives “protect the interests of the company as efficiently as possible” and ensure a “close exchange of information,” the company said in a separate statement earlier on Thursday.

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