Cinven vs. Advent? Stada Bidding War Possible after New €3.5-Billion Bid

Drug maker Stada will start takeover talks with two investors, Cinven and Advent, after the British and U.S. private equity firms expressed interest in buying the midcap-listed firm. Its stock jumped as much 17.5 percent.
Stada has attracted takeover interest.

After months of turmoil over the summer, drug maker Stada may be heading for a bidding war.

The maker of cold medicine Grippostad and Ladival sun lotion has confirmed receiving two bids for its business, one from British investor Cinven worth €3.5 billion, or $3.7 billion, and another from Advent International, a Boston-based private equity firm.

Stada, which first attracted activist investor interest in May and saw its chief executive and chairman resign in August, announced the Cinven bid in a statement late Sunday, confirming a report from the Financial Times. In another statement Monday it named Advent as the second bidder, though it didn't name a price.

"The executive board of Stada Arzneimittel has today decided unanimously to start open-minded talks with both potential bidders for the acquisition of up to 100 percent of the shares in the company," Stada said in its statement on Monday.

Shares in the midcap-listed firm jumped as much as 17.5 percent in Frankfurt, reaching an all-time high. They traded up 14.5 percent at €56.90 a piece by 2.47 P.M. local time, above Cinven’s non-binding, indicative offer of €56.

The potential bidding war comes after investment firm Active Ownership Capital, or AOC, bought a 5-percent stake in Stada in May and started pushing for a reorganization of the non-executive supervisory board. AOC had complained that Stada, with revenues of around €2.1 billion and €110 million in net profits, could be more profitable.

Stada, which competes with companies like Novartis, Teva and Sanofi, then attracted the interest of U.S. investor Guy Wyser-Pratte, which built up a stake of almost 3 percent last June. The investor also claimed CVC Capital Partners could play a role in a merger. CVC declined to comment at the time.

Mr. Wyser-Pratte has criticized Stada for not being aggressive enough in pursuing mergers and has called for a leadership change.

“The days of management are numbered,” Mr. Wyser-Pratte told Handelsblatt.

He said Stada’s leadership was standing in the way of the company’s future development and said Chief Executive Matthias Wiedenfels should go.

“Wiedenfels will ask for a nice retirement package, and he will probably get one," Mr. Wyser-Pratte said. “But then it’s bye-bye. Stada has many very qualified managers in its rows. But the guys at the top are not needed.”