Alliance Pharma’s largest shareholder increases takeover offer

Alliance Pharma’s largest shareholder, DBAY Affiliates, has increased its takeover offer for the healthcare group to £362m.

The 64.75p-per-share, all-cash offer is £12m higher than its offer in January.

Two weeks ago the approval meetings were delayed “to provide further time for discussions” with shareholders. DBAY has now increased its offer, which it has described as final, ahead of a meeting on Thursday.

The Chippenham-headquartered healthcare group sells over-the-counter and prescription drugs around the world, with its brands including Kelo-Cote, Anbesol and Lypsyl.

Asset management firm DBAY first made an approach to the Alliance board in the wake of the chief executive Peter Butterfield departing and its annual results being delayed last May.

It has been acquiring Alliance shares for more than two years and now controls 27.9% of the company.

In a statement issued alongside its initial takeover offer in January, it said: “DBAY is supportive of Alliance’s leadership team and believes in Alliance’s future prospects but considers that Alliance needs to implement a range of operational and strategic initiatives, in conjunction with a period of accelerated investment and selective acquisitions of complementary products, in order to fulfil the growth potential of the business.

“It has become apparent to DBAY that Alliance needs time away from the public market to allow it to fully deliver these initiatives in a reasonable timeframe.”

Alliance faces some international challenges. Around 30% of its revenue comes from China, “and a much larger proportion of profit”, it said, which it acknowledges is “exposed to significant geopolitical risk”. Separately, its North Amercian business has seen declining revenues for two years.