Shares in drug inhalation technology company Vectura (VEC:AIM) surged 13% to 153p after US tobacco giant Philip Morris had a 150p per share cash offer accepted by the UK company.
Today’s agreed offer topped the 136p per share offer tabled by private equity firm Carlyle and represents a 46% premium to the ex-dividend closing price prior to the Carlyle offer on 25 May 2021.
WHY PHILIP MORRIS WANTS VECTURA
Philip Morris claims that Vectura’s capabilities to deliver precise formulations of medicine to targeted areas through its expertise in inhalation technology is a good fit with its long-term ambition to focus on respiratory drug delivery and inhaled therapeutics.
The US company noted that the market for inhaled therapeutics is large and growing rapidly and there is ‘significant’ potential to expand into new application areas.
Philip Morris has already committed resources to its own internal pipeline for the development of inhaled over the counter and prescription products.
In addition, Philip Morris said it was supportive of Vectura’s strategy to become one of the leading drug contract and manufacturing companies in its segment.
Under its ownership Philip Morris believes it can ‘further enhance an already strong foundation through the access to capital and complementary expertise’.
Vectura would operate as an autonomous business unit under the new ownership.
HEATHCARE PUSH
Philip Morris has committed to becoming a predominantly smoke free company by 2025 and has built the world’s leading brand- IQOS which generated $6.8 billion of revenues last year, a quarter of the parent company’s business.
The company aims to generate $1 billion of revenues from products beyond tobacco and nicotine by 2025. It claims it has invested over $8 billion since 2008 developing smoke free products with the aim of ‘disrupting its own traditional businesses’ with the aim of accelerating the end of smoking.
In light of the superior offer from Philip Morris, Vectura’s board said it deemed the proposed acquisition to be fair and reasonable.
The potential takeover of Vectura would be the latest in about 60 deals this year that have seen overseas buyers swoop for UK listed companies.
