Anger at inhaler maker Vectura’s board backs ‘unacceptable’ takeover bid from tobacco giant Philip Morris | Business news

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The board of British drugmaker Vectura has backed a takeover bid from tobacco giant Philip Morris International (PMI), despite pressure from health groups.

PMI, the company behind Marlboro cigarettes, has offered 165 pence a share – or about £1.1 billion – for the Wiltshire-based company, which makes inhaled medicines and devices to treat respiratory conditions such as asthma.

Its rival, US private equity firm Carlyle, offered 155 pence per share and said earlier this week it would not increase its offer, which it described as “full and fair”.

The Vectura Board of Directors has come under significant pressure from politicians such as shadow health secretary Jonathan Ashworth, as well as several health organizations, all concerned with such an association.

Following Vectura’s announcement on Thursday, the chief executive of Asthma UK and the British Lung Foundation described PMI’s move as “unacceptable”.

Sarah Wolnow said: “The proposed takeover of Vectura by Philip Morris International is unacceptable in every possible way.

“Together with representatives from more than 20 organizations, I wrote to the Vectura Board of Directors today urging them to decline the bid. They have decided to recommend, so it is now up to the shareholders.”

In the letter, the organizations said that if the acquisition goes ahead, Philip Morris International “could benefit from treating the illnesses caused by its products.”

Photo: Philip Morris is the company behind Marlboro cigarettes. Pic: AP

The American Lung Association and the American Thoracic Society had previously said a PMI offering was “the latest frowned upon option from a company that has profited from users’ addiction to its killer products.”

But the board said Thursday night that it considers the terms of the PMI offer “fair and reasonable,” adding that it plans unanimously to recommend the tender to shareholders.

In a statement, the Board of Directors said: “Vectura managers recognize the superior cash price that the final offering of the PMI provides to Vectura shareholders.

“Vectura directors also note that broader stakeholders can benefit from PMI’s significant financial resources and intentions to increase investment in research and development and to operate Vectura as an independent business unit that will form the backbone of its inhalation therapy business.”

PMI has always said it wants Vectura to operate as a standalone unit, adding that it sees the acquisition “as part of a natural evolution into a broader healthcare and wellness company.”

It hopes to generate at least $1 billion (£720 million) in net revenue from “non-tobacco and nicotine products” by 2025.

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