Jones Lang LaSalle


Croat Pliva expects binding offers soon - source
Wed Jun 7, 2006 5:51 AM ET
By Igor Ilic

ZAGREB, June 7 (Reuters) - Potential buyers of Croatian drugs maker Pliva will complete due diligence within the next few weeks, after which binding offers are expected, an industry source said on Wednesday.

Pliva, the largest east European pharmaceutical firm by sales, is weighing various strategic options after Icelandic generic drugs maker Actavis made a preliminary offer to buy the Zagreb-based firm earlier this year.

Pliva rejected Actavis's bid as too low and said it had other suitors knocking at its door, but did not name them.

"Several parties which expressed interest in Pliva will have completed due diligence in the next two to three weeks at most. Then we can expect binding offers," the source, who asked not to be named, told Reuters.

Pliva has hired Deutsche Bank to advise it in choosing the best option, which may include a merger or strategic partnership. Pliva operates in more than 30 countries and sees the generic business, including biotechnology, as its main earnings driver after failing in the proprietary field.

According to industry analysts, Pliva will find it hard to survive on its own in an increasingly consolidating pharmaceutical sector and some kind of a capital link with another company is expected by autumn.

Actavis first offered to take over Pliva for $1.6 billion or 570 kuna ($100.7) per share, but then hiked its offer to 630 kuna per share, which raised the overall amount to almost $2 billion. It is the only company which has publicly expressed interest in Pliva.

Pliva's shares were traded at 614 kuna in morning Zagreb trade, 1.07 percent higher from Tuesday's close.

The Financial Times reported last month that U.S. drug maker Barr Pharmaceuticals was also among the bidders, and that its offer was worth $2.1 billion.

Both Pliva and Barr declined any comment and Barr only said it was eyeing ways to enter the European market, where it has no presence yet.

"No formal offers, including that from Barr, have reached Pliva yet," the source said.
Pliva's chief executive, Zeljko Covic, said last month that those interested in Pliva included pharmaceutical firms, but also financial investors.

Croatian media speculated that besides Actavis and Barr, the bidders included investment groups KKR&Co, Blackstone Group and Permira Holdings.