Vectura Group PLC (AIM:VEC), the respiratory drugs group, has received an increased bid from tobacco giant Philip Morris International Inc. (NYSE:PM), trumping a previously improved offer from private equity firm Carlyle Group.
Carlyle, which has US$260bn of assets under management, had initially agreed a takeover of Vectura in May, valuing it at 136p per share.
READ: UK government urged to block Philip Morris takeover of Vectura
Then last month, Philip Morris swooped in with a bid of 150p per share; however, last Friday, Vectura recommended an improved offer of 155p from Carlyle.
Philip Morris is now back with a 165p per share proposal, valuing Vectura at £1.02bn.
There are various groups that have been opposing a potential acquisition by the Marlboro cigarettes producer, such as anti-smoking activists and medical research charities, based on concerns that Vectura’s work will be at risk.
Jon Ashworth, Labour’s shadow health secretary, and Ed Miliband, the shadow business secretary, also both urged the government to intervene.
Business Secretary Kwasi Kwarteng asked officials to investigate the rationale for the cigarettes maker to buy Vectura, given that the drugs it develops are used to treat diseases often caused by smoking.
Philip Morris said it is building a portfolio that goes “beyond nicotine”, planned to generate at least US$1bn revenues by 2025, having identified respiratory drug delivery as a key focus.
If it becomes part of the US-based giant, Vectura will operate as an autonomous business unit focusing on inhaled products, with the opportunity to expand into new markets, Philip Morris said.
The pair will develop a new pipeline of products in the prescription drugs and over-the-counter categories, for example within cardiovascular and pain management.
The cigarette maker said that its move into the pharma space is founded on “strong understanding of aerosolisation and respiratory technology” and “its promising product development pipeline”, having invested over US$8bn in nicotine-free products since 2008.
The goal is to become “predominantly smoke-free” by 2025, with more than half of its net revenues from smoke-free products, such as tobacco heater IQOS.