Activist Investor to Pressure Stada AG to Explore Potential Sale -- 2nd Update
03 May 2016 - 10:35AM
Dow Jones News
By Eyk Henning
FRANKFURT--A German activist investor has accumulated a 5% stake
in Stada Arzneimittel AG, with a view to potentially pushing a sale
of the generic drugmaker, according to several people familiar with
the matter.
Active Ownership Fund SCS acquired a direct 5% stake and holds a
further 2% via stock options, regulatory filings from early April
show.
Representatives of the fund have approached large hedge funds in
London and New York with the goal of gathering support for their
plan, people familiar with the fund's thinking said. A spokeswoman
for Active Ownership declined to comment.
With a wave of consolidation under way in the generic drug
industry, Stada has been the target of takeover speculation for
some time. But the company, with a current market value of roughly
EUR2.4 billion ($2.76 billion), has so far sidestepped overtures
from private-equity firms and bigger rivals, including India's
biggest drugmaker by sales, Sun Pharmaceutical Industries Ltd.,
people familiar with the matter said.
Complicating any hostile takeover approach is Stada's special
share type, which has restricted transferability, enabling company
management around Chief Executive Hartmut Retzlaff to block an
unsolicited offer. Bankers said an activist shareholder with a
large minority stake, however, could at least put management under
pressure to consider exploring strategic options, including a
sale.
Following Active Ownership's regulatory filings in April,
several banks reached out to Stada to obtain a defense mandate. It
is unclear whether Stada has chosen a bank.
Additionally, managers at some large hedge funds that were
approached by Active Ownership's co-founders Florian Schuhbauer and
Klaus Röhrig said they were skeptical about the plan because of
questions about which suitors would emerge to buy Stada. One
potential suitor could be India's Sun Pharma, people familiar with
the matter said, adding it was unclear whether the company would
pursue Stada.
A spokesman for Sun Pharma Tuesday denied the notion of a
potential bid for Stada, adding it hasn't approached the German
rival. A spokesman for Stada declined to comment.
Elsewhere, Israel's Teva Pharmaceuticals Industries Ltd. would
face tough antitrust hurdles after snapping up Stada's German rival
Ratiopharm for around $5 billion in 2010. Mylan NV in the U.S. is
currently digesting the more than $7 billion acquisition of Swedish
pharmaceutical company Meda AB. Another potential acquirer, Perrigo
Co., is currently struggling after it cut its guidance and lost its
CEO, Joseph Papa, last month.
Write to Eyk Henning at eyk.henning@wsj.com
(END) Dow Jones Newswires
May 03, 2016 05:20 ET (09:20 GMT)
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