Another private takeover: Alliance Pharma offered £350m
The London Stock Exchange is facing yet another private takeover, with Alliance Pharma offered £349.7m in an all-cash deal.
The AIM-listed firm, which sells over-the-counter drugs in over 100 countries, has seen its board recommend the takeover unanimously by asset manager DBAY Advisors and Edmond de Rothschild’s ERES IV fund.
The group’s stock price jumped more than 35 per cent in pre-market trading after the offer was announced.
The 62.5p share offer represents a premium of about 41 per cent over Alliance Pharma stock’s price before the news of the deal.
The offer is the latest in a long line of takeover attempts of British companies by private equity and asset management firms, ranging from FTSE 100 giants like Darktrace to a long list of smaller companies.
Last year, more than 45 London-listed firms were approached, agreed to, or completed acquisitions, with many coming from unlisted firms.
For Alliance Pharma, while the deal may represent a premium to its current share price, it is almost half its 2022 share price high.
Since listing in 2003, Alliance has transitioned from a speciality pharmaceutical business towards consumer healthcare, with around 75 per cent of its revenue now coming from the sector.
The company’s new CEO, Nick Sedgwick, who joined in May 2024, has been engaging in a turnaround plan but cited the cost of the plan as a key reason for the takeover.
“The Alliance directors recognise that delivering the new strategic plan outlined above will take significant time and investment to deliver its potential benefits,” the firm said.
“Furthermore, a number of uncertainties exist around plan delivery, some of which are beyond Alliance’s control.”
“Alliance has faced challenges in executing a growth strategy and getting full value from its legacy roll-ups,such that it was difficult to imagine management being given a remit to do more on public markets,” said Peel Hunt analysts.