Iceland’s Actavis has filed its $2.3 billion takeover offer for Pliva with the Croatian regulatory authorities, upping the ante as it tries to wrest the company from rival bidder Barr Pharmaceuticals of the USA.
Actavis was ordered to file its intentions with the Croatian Financial Services Agency (HANFA) yesterday after the company announced it had bought around 20% of Pliva as well as statements on its website indicating that it planned to launch a takeover.
Actavis’ stake building is thought to be a strategy to make it difficult for Barr to gain control of the 50%-plus stake in the Croatian firm needed for its offer to go ahead, but the official filing means that it can no longer buy shares on the open market. The Croatian government also owns around 18% of Pliva, and according to Barr has said it will consider selling its stake in the firm, providing the buyer commits maintaining facilities and employment levels in the country.
Both Barr and Actavis are obliged to get approval from HANFA for their bids to proceed, and Actavis said it also expects to complete antitrust filings in all necessary territories within the next couple of days. Barr, which is Pliva’s preferred merger partner, has reportedly already submitted its offer to HANFA.
Actavis has offered 723 kunas per share for Pliva, while Barr has pledged 743 kunas. Both offers are in the region of $2.3 billion.
The bidding war for Pliva comes at a time when consolidation is gripping the generic drug sector, with Actavis among the most acquisitive of players, having already absorbed 20 companies in the last few years. Both Barr and Actavis want to tap into Pliva’s low-cost production base and presence in the emerging markets of central and Eastern Europe.
Actavis says acquiring Pliva will make it the third-largest generics company in the world, after Teva and Sandoz. Scale is important in generics, because healthcare payers are increasingly trying to deal with single providers of pharmaceuticals to cut costs, and companies which can offer a broad range of products have a competitive advantage