Carlyle increases offer in bidding war for UK inhaler-maker Vectura

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Private equity firm Carlyle has increased its offer for UK-based inhaler maker Vectura, outbidding a rival proposal from tobacco group Philip Morris International.

Carlyle said on Friday it would offer 155p in cash per share for Vectura, which is above both the 136p per share it offered in May and the 150p counterbid that came from PMI last month. The higher offer values Vectura’s equity at £928m.

The US buyout firm also said a group of investors that own 11.2 per cent of Vectura’s equity, including Axa Investment Management, had said they would back its revised offer. Vectura’s share price rose 6.4 per cent to 164p following the announcement.

Vectura chair Bruno Angelici welcomed the higher bid, saying it was “a highly attractive offer for Vectura shareholders”.

When it made its offer in July, New-York listed PMI said the proposed acquisition was part of its plan to shift away from tobacco and recast itself a “healthcare and wellness company”.

In a statement acknowledging the revised Carlyle bid, Vectura said some of its stakeholders could be adversely affected if the company were to be bought by PMI.

PMI’s efforts to acquire Vectura, a UK-based company that develops medicines and devices to help with breathing problems, have been met with criticism from anti-smoking campaigners. The tobacco group, which sells the Marlboro brand in much of the world, has been trying to diversify into alternative products as cigarette sales have declined significantly and has said it is committed to reducing smoking.

Vectura, one of the few companies that delivers a range of complex inhaled therapies, generated revenues of £190.6m in 2020, up 7 per cent from the year before. But sales of its biggest product, the Flutiform asthma inhaler, declined 6 per cent year on year.

Carlyle has been making a concerted effort to push into the European healthcare market, last year hiring former GlaxoSmithKline chief financial officer Simon Dingemans to oversee UK buyouts and healthcare deals across the region.

The rush of private equity capital into UK-listed groups has become a hotly debated topic in Britain, however. Over the past six months, buyout groups have announced bids for UK-listed companies at the fastest pace in more than two decades.