Stada eyes €3.7B buyout to dodge activists' demands: WSJ

By Carly Helfand May 26, 2016 10:00am

Stada’s shares have been trending upward on speculation that pressure from activist investors could spur a sale of the company. And now, it looks as if investors may have been onto something.

The German pharma has been holding informal takeover discussions with private equity firm CVC Capital Partners, sources told The Wall Street Journal, talking up a potential buyout that could value Stada at about €3.7 billion ($4.1 billion).

Other private equity outfits have also gotten in touch with the generics maker, though it’s unclear whether they’ve scored any face time.

Takeover buzz surrounding Stada, which also makes OTC products like sunscreen, is nothing new. It’s been a magnet for buyout speculation in the rapidly consolidating generics industry for some time now, but as sources told the Journal, the company’s top brass has given the cold shoulder to wannabe buyers.

Now, though, things are different, thanks to rebel shareholder Active Ownership Capital, which has amassed a 5% stake in the drugmaker. The fund has been working to overhaul Stada’s board--lobbying to replace 5 members--and lobbing criticisms at management, claiming Stada has underperformed its peers in the profitability department. Other prominent investors have joined in the chorus, too, the Journal notes.

And while at one point this month it looked as if the two sides were ready to compromise--they appeared to strike an agreement allowing Active Ownership to nominate three board members--any accord came crashing down earlier this week. Stada declared that it was also in favor of a director shake-up, though it made it clear that it would be the one to do the nominating.

- see the WSJ story (sub. req.)

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