Nycomed A/S may raise its offer for Solvay SA’s drugs unit after its bid fell short of the owner’s 5 billion-euro ($7.35 billion) target, according to people familiar with the situation.
Nycomed offered 4 billion euros to 4.5 billion euros for the unit, said the people, who declined to be identified as the negotiations aren’t public. U.S. drug and device maker Abbott Laboratories and Takeda Pharmaceutical Co. of Japan are also interested in the unit, the people said.
Solvay plans to hold a board meeting today to weigh new offers for its pharmaceutical unit, which makes the TriCor cholesterol pill, and could announce an agreement as soon as next week, one of the people said. The company may still opt to sell shares in the unit rather than sell it, the person added.
“It’s a last minute scramble to clinch this asset,” said Joshua Owide, senior analyst in London at PharmaVitae, a unit of Datamonitor Plc, in a telephone interview today. “It makes sense for Solvay to try and get the highest price possible.”
Nycomed, whose owners include Nordic Capital and a buyout unit of Credit Suisse Group AG, is expanding as it prepares for an initial public offering in 2011, a person familiar with the situation said on Sept. 11. Solvay may divest its drug division, responsible for 28 percent of last year’s sales, to focus on its chemicals and plastics businesses.
Solvay spokesman Erik De Leye and Nycomed spokeswoman Beatrix Benz both declined to comment. Abbott spokesman Scott Stoffel said in a telephone interview that his company doesn’t comment on “marketplace rumors.” Officials at Takeda weren’t immediately available to comment.
Nycomed Combination
Combining Solvay with Nycomed would create a company with drugs to treat heart, gastrointestinal and central nervous- system diseases, with operations in Europe and emerging markets. Combined, the firms would have sales of about 6 billion euros, making them Europe’s eighth-biggest drugmaker.
Nycomed plans to tap the U.S. and European high-yield bond markets for about 2 billion euros to help fund the bid, people familiar with the situation said. Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are arranging the funding, the people said.
Abbott, of Abbott Park, Illinois, is a co-promoter of TriCor, which generated 511 million euros in sales for Solvay in 2008, and $1.34 billion for Abbott.
Change in Course
Its interest in Solvay would mark a change in course. Abbott’s chief financial officer, Thomas Freyman, said in July the company wasn’t interested in purchasing drugs from Solvay. Abbott Chief Executive Officer Miles White has been buying medical devices and eye products to reduce the company’s reliance on medicines.
“The rationale of the deal would be an important one for Abbott,” said PharmaVitae’s Owide, for whom the U.S. company’s pipeline is a “weak” one. “Abbott will need to utilize M&A in order to reinforce its position.” Solvay would be “the deal that makes the most sense,” he said.
UCB SA, which like Solvay is based in Brussels, may also consider an offer for the Solvay business, according to the Wall Street Journal. UCB spokeswoman Cindy Maas declined to comment.
Solvay, which introduced one of the first modern antidepressants in 1983, ranks as the world’s biggest producer of soda ash, used to make glass and modify the acidity of shampoos.
The company gets much of its annual revenue from the automotive and construction industries, which are among the hardest hit by the recession. TriCor, known chemically as fenofibrate, is used to reduce triglycerides and adjust cholesterol levels.
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