Tobacco giant raises stakes in Vectura battle

tHe takeover battle for Vectura became a full-scale bidding war yesterday as Philip Morris International outbid its private equity rival for a second time.

the maker of Marlboro cigarettes raised its 150p per share bid to 165p, equivalent to just over £1bn. the offer is a 10p, or 6.5pc, premium on the 155p bid, or £958m, made by US buyout firm Carlyle on Friday.

Philip Morris International (PMI) also challenged its bidding rival by claiming it was a better long-term investor than a private equity firm, which typically sells a company after three or five years.

It said: ‘PMI’s business model and strategy is driven by a long-term commitment to the transformation of its business, not a search for shortterm gains and efficiency.’ the bidding war threatens to further embarrass the board of the Wiltshire-based respiratory drug company, which has switched its allegiance twice.

It initially backed Carlyle’s first offer of 136p per share in May. It then flipped to Philip Morris in July when the tobacco titan offered 150p, before returning to support Carlyle’s 155p bid on Friday.

Carlyle, it said, was ‘well aligned with Vectura’s wider stakeholder objectives’, adding the firm may be ‘better positioned’ under its ownership.

the fresh bid may force the board, led by chairman Bruno Angelici, to reconsider its support once again.

Vectura’s share price was expected to rise this morning beyond last week’s closing price of 163.9p as Carlyle was forced to weigh a higher bid. the US investment company has sought to play up its ‘30 years’ of experience in the healthcare sector, and has also received backing from 11.2pc of Vectura’s investors.

PMI said it will invest heavily in research and development, and use Vectura to develop technologies for non-smoking cigarettes as it rebranded as a ‘wellness company’.

Its interest has sparked outrage from MPs and charities, who said they were ‘horrified’. they pointed out that, if its bid is successful, a company whose products cause lung diseases could profit from development therapies to treat them.

Chippenham-based Vectura, makes revenues from royalties from drug patents which are licensed to other companies.