Having rejected an earlier offer, Icelandic generic specialist Actavis has unanimously recommended a new takeover bid from an investment firm which is led by its own chairman.
Novator, the investment group which is led by billionaire and Actavis chairman Bjorgolfur Thor Bjorgolfsson, already holds approximately 38.5% of the firm’s A class shares and has made a revised offer to acquire the rest. Actavis shareholders would receive 1.075 euros per share, which represents a premium of 19.6% on its closing price on May 9, the day before its initial offer was announced, and an additional 10.6% increase on Novator’s first offer of 0.98 euros per share.
The revised offer also contains a clause where Actavis shareholders are entitled to receive an additional payment in the event that Novator sells 10% or more of its stake within 12 months of the revised offer closing.
The Icelandic group’s board (excluding Mr Bjorgolfsson, plus two other executives Andri Sveinsson and Robert Wessman), says that following consultation with financial advisors JPMorgan, it believes that “the terms of the revised offer are fair and reasonable to Actavis shareholders”. This acceptance seems to suggest that the directors are now prepared to go along with Novator’s financing of the deal and its future plans for Actavis and its senior management, which they had been concerned about before.
Novator wants to take the firm private as the investment group said in its original offer that such a move is necessary so that Actavis is "no longer restrained by the obligations and requirements which are placed on listed companies, including that of disclosure". It also stated that it intends to finance a significant element of the transaction through debt funding, and added that it would seek to "adopt a more entrepreneurial and hence riskier approach” to the company's operations, to cut the number of board members to three from five.