Biotest valuation uptick inspires takeout interest despite two previous attempted sales, sources say (mergermarket)
Biotest Pharmaceuticals (FRA:BIO3), the German company involved in hematology and immunology products, is starting to see its takeout chances increase as its valuation is reinvigorated, industry sources said. This comes despite two unsuccessful sales attempts in the past, they noted.
Biotest has run two sales processes over the last few years, one source familiar with the company's strategy said, but both were considered "botched" primarily due to a hesitation to sell. As a result, firms have become fatigued at the thought of discussions for the asset. Still, the source did not rule out a sale if management would "come round and say let's do a strategic deal."
The company, which industry reports last year slated as being for sale, apparently retracted this strategy due to a decrease in valuation. But as the dust particles have started to settle, bankers are starting to feel confident that discussions for a sale can resume, sources said.
Biotest's shares have traded in the EUR 27.51 to EUR 45.23 range in the last 52-weeks. The stock is currently trading in the EUR 35 range.
A second source familiar with the company's strategy showed excitement over Biotest and said the company is still considered an attractive target, and could be well suited for Baxter (NYSE:BAX), CSL Ltd (ASX:CSL), Italy-based Kedrion and Swiss-based Octapharma.
In 2004, Australia-based CSL bought Aventis Behring, the US plasma therapeutics company, for USD 550m, at a time when Biotest was for sale, the first source said. This will likely hinder CSL's interest, especially as it had tabled an offer for Biotest, but due to poor negotiations with Cathrin Schleussner, Biotest's deputy chairperson of the board, CSL retracted this offer and proceeded to buy Aventis Behring, the first source claimed.
Biotest CFO Michael Ramroth commented that it is obvious that CSL is looking for buys as the company recently attempted to acquire Talecris (NASDAQ:TLCR) but the deal was halted because of antitrust issues. He said that Biotest was not interested in a sale to CSL.
Ramroth declined to comment further on the matter, but said that Baxter, CSL and Talecris are the three big companies holding 60% of the plasma market.
Biotest’s spokesperson declined to disclose whether the company is a takeover target in the plasma space or whether the firm was engaged in any recent M&A talks.
Both Kedrion and Octapharma are the two most likely buyers, the first source said, with Illinois-based Baxter a distant number three.
A third source familiar with the company strategy noted that Kedrion had hired JPMorgan to go public last year, but because the market fell away, the firm then sought to sell a stake to private equity. Kedrion was unable to garner the valuation it wanted and it is now evaluating its opportunities and reconsidering an IPO again, the third source claimed, adding that for this reason it could be distracted from making any acquisitions.
Kedrion commented that it is considering several growth opportunities and said that suggestions of its interest in acquiring Biotest are "completely groundless."
One industry observer also commented that Biotest is interesting, and relayed industry rumors that the firm could be up for sale, despite the fact that the company’s management is claiming it would not be sold. Baxter would "absolutely make sense" as a buyer, the observer said.
Biotest’s family shareholder owns 50.03% of the holding stock of ordinary shares and until the family agrees, the company cannot be sold, the observer said. However, the observer noted talks that the family owners are "getting older" and the successors may be less interested in holding onto the shares. Ramroth commented that the shareholder situation “remains unchanged.”
When asked about possible interest in Biotest’s microbials business on the back of the recent sale of Millipore to Merck KGaA (OTC:MKGAY), Ramroth said that Millipore is Biotest’s competitor in Germany, Austria and Switzerland and “there have been a lot of enquiries from interested companies about giving up this business for sale but we are not interested.”
Biotest has a market cap of EUR 409m.
by Sasha Damouni and Kirsty Barnes
Source: 06/05/2010 Mergermarket.com
