Philip Morris International Inc (NYSE:PM). (NYSE:PM) has bought 22.61% of Vectura Group PLC (AIM:VEC) (AIM:VEC) as shareholders have been urged to vote against the 165p per share takeover offer.
In a somewhat aggressive move, the tobacco giant acquired 135mln shares at 165p each and called for institutional investors interested in selling more.
READ: Vectura Group tells Carlyle Group to butt out as board opts to take tobacco company's money
Meanwhile, a group of health experts led by Asthma UK and the British Lung Foundation said that the takeover would “significantly hamper Vectura’s ability to continue operating as a viable, research-oriented business”.
“Many university and hospital collaborations are likely to be rejected and participation in clinical trials blocked, disrupting crucial drug development – one of Vectura’s major business activities,” they said in an open letter. “A takeover by PMI is therefore likely to cause significant disruption to Vectura’s operations and future profitability for its shareholders.”
Shareholders were asked “to consider both the business risks and the moral conflict of the proposed takeover. Tobacco companies should not profit from treating the illnesses their products cause,” The Guardian reported.
The asthma inhalers maker recommended that investors accept the bid by the Marlboro cigarettes owner, rejecting instead a 155p offer backed by private equity group Carlyle, sparking outrage.
Vectura makes asthma inhalers and other treatments for respiratory diseases, including COPD, which is also called ‘smoker’s cough’.
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.
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.
Campaigners are concerned of the ethical and research implications if the acquisition goes ahead, alongside the establishment of a precedent.
Shares were flat at 164.7p on Wednesday morning.
--Adds shares acquisition--