A day after Germany’s Ratiopharm was put up for sale, another major generic drugmaker – Actavis – is also about to go under the hammer.

Rumours of a sale of the Icelandic firm have been rumbling for some time, not least when it was revealed that Novator, the investment group led by billionaire Bjorgolfur Thor Bjorgolfsson which owns most of Actavis, started to restructure its finances once the credit crunch hit the island hard. Novator took Actavis private in November 2007.

Actavis spokeswoman Hjordis Arnadottir told PharmaTimes World News that the company does not wish to comment on plans for an auction but was reported elsewhere as saying that the firm had been reviewing its options – including a merger, acquiring a rival or selling the business – for several months. However, Merrill Lynch has been retained to run an auction and the next few weeks should see some activity.

The question now is how much Novator will get for Actavis. The deal to take the firm private cost around 5.5 billion euros and the investment group will be hoping to at least recoup that.

The Financial Times quotes Rupert Hill, a managing director in the European healthcare division at Bank of America Merrill Lynch, as saying that he would be surprised if the sale was not for more than previous estimates of 4.5-5 billion euros. ”I can’t think of a single multinational generic drugs company that has not been sold for at least a mid-teens multiple to earnings,” he said, citing the purchase of the Czech Republic’s Zentiva by Sanofi-Aventis.

Earnings before interest, tax and depreciation for 2009 have been estimated to reach 600 million euros, which suggest a target price of around 8 billion euros. As for possible purchasers, the usual suspects in the generics world – notably Teva – have been mentioned, but research-based majors are also expected to be interested.

The FT cites individuals close to the discussions as saying that two generics companies are interested in a merger, while GlaxoSmithKline, Pfizer, Sanofi and Novartis had also expressed interest. The source also claims that “a large Japanese innovative drugs company” has also held preliminary talks about a purchase.