Stada gives suitors more time to raise bids regarding potential takeover

Stada Arzneimittel confirmed Thursday that it has "postponed" planned presentations to bidding groups, which reportedly include two competing private equity consortia that have made offers worth about 3.7 billion euros ($4 billion). The company said its "executive board and supervisory board mutually agree that the indicative bids do not yet reflect the fundamental value of Stada," adding that "for the time being, [we want] to provide the bidders the opportunity to increase their offers."

Last month, Stada said it had received two non-binding takeover proposals, including one from private equity group Cinven for 3.6 billion euros ($3.9 billion) at 56 euros ($60.32) per share, which represented a 15-percent premium to Stada's closing price on February 10. People familiar with the matter have suggested that Cinven is working with Bain Capital to negotiate a deal for Stada, while another competing investors group consists of Advent International and Permira.

Sources have also indicated that Shanghai Pharmaceuticals will decide in the coming weeks whether to join forces with private equity firm CVC Capital Partners regarding a potential bid for the German drugmaker. However, Stada denied that its move was "aimed [at making] another committee composed of a private equity company and a strategic investor enter the process."  

Meanwhile, people familiar with the matter suggested that Stada chairman Carl-Ferdinand Oetker is pushing senior executives to cut costs and consider more aggressive measures to improve performance in a bid to encourage higher offers. Sources said Stada may increase its profit guidance when it reports annual results on March 23, weeks after the company stated that this year's earnings could rise by as much as 11 percent to 450 million euros ($483 million).