* Says preliminary discussions may lead to offer
* Hires Goldman Sachs as adviser
* Shares rise as much as 24 pct
(Adds analyst comments, updates stock price)
April 30 (Reuters) – Specialty pharmaceutical company Warner
Chilcott Plc said it would explore strategic options,
including preliminary talks with potential buyers, sending its
shares up as much as 24 percent.
The company, which makes women’s healthcare and dermatology
products and other specialty drugs, said it hired Goldman Sachs
as its financial adviser.
The announcement comes after reports of Bayer AG
making a bid for the Irish drugmaker at $32 per share.
Last week, sources told Reuters that the German drugs and
plastics maker Bayer was close to making a multibillion-euro
acquisition to strengthen its healthcare division.
“I don’t know about Bayer as a buyer. This doesn’t seem to
me that that gets them anything that they’d need,” said
Jefferies & Co analyst Corey Davis.
“I’ve always seen Warner as more of acquirer than acquiree
given their declining revenue stream, but bigger companies are
completely loaded with cash and there’s tons of M&A; going on,”
Davis said, adding that he believes that “this is really more
the start of the process than nearing the end.”
In January, Warner Chilcott had forecast a weak 2012 on
lower sales and loss of market exclusivity for its key
osteoporosis drug Actonel in Western Europe. Warner Chilcott’s
acne drug Doryx also faces generic threat.
Asked what Warner has to offer a potential buyer aside from
cash flow, Davis said, “a women’s health franchise and the
durability of Asacol are probably their two biggest strategic
assets right now.”
Asacol for ulcerative colitis has annual sales of about $800
million.
Morningstar analyst David Krempa also said he would be
surprised if Bayer were interested in Warner Chilcott and
suggested that it may be looking to sell off Actonel rather than
the entire company.
“Their product portfolio has a lot of patent issues coming
up, which will kind of limit the amount of people that are
interested in buying the whole company,” Krempa said.
“If they could get someone interested in the entire company,
they would definitely be open to that,” Krempa said. “But if
they can’t, then I think they would still be open to selling
only certain assets.”
The company said it would not discuss further developments
until the board has approved a course of action or deems further
disclosure to be appropriate or required.
Warner Chilcott shares were up 16.1 percent at $21.81 at
midday on the Nasdaq, off an earlier high at $23.28.
(Reporting By Bill Berkrot in New York; additional reporting by
Zebi Siddiqui and Vidya P L Nathan in Bangalore; Editing by
Joyjeet Das, Gopakumar Warrier and Matthew Lewis)
