Lek warms to new Novartis offer

Major Lek shareholders have welcomed the revised offer.

Major shareholders in the Slovenian drugs company, Lek, have accepted a takeover offer tabled by the Swiss pharmaceuticals giant, Novartis.

This content was published on October 21, 2002 - 16:03

The announcement came after Novartis raised its bid price by ten per cent to value the company at $860 million (SFr1.3 billion).

Last September, Lek shareholders turned down a previous cash offer from the Basel-based company of 95,000 Slovenian tolars ($406) per share, arguing that the asking price was too low.

The success of the bid depends on Novartis acquiring at least 51 per cent of Lek's share capital.

The company's main shareholders, Kapitalska Druzba (KAD) and Odskodninska Druzba (SOD), which together hold a 27.5 per cent stake in Lek, have made it clear that they will accept the increased offer.

Revised offer

Felix Raeber, a spokesman for Novartis, told swissinfo that the revised offer of 105,000 tolars ($446) per share was also likely to be accepted by a majority of remaining shareholders.

"We're very confident that this bid will be accepted by a lot of shareholders so that we can have more than 51 per cent of the shares," he said.

Matej Tomazin, an analyst at brokerage Ilirika, welcomed the revised offer.

"The raised bid ensures that the takeover of Lek will succeed," he said.

If the takeover is given the green light, Novartis will be in a position to expand its capacity to manufacture generic versions of the Augmentin antibiotic, developed by British drug giant, GlaxoSmithKline.

"The main reason why we want to take over Lek is that the company is very established on the generics market - an area in which Novartis is not that present," Raeber commented.

"This is purely a generic deal, which means drugs that are no longer under patent protection."

Novartis shares were up just under one per cent at SFr57.05 in early afternoon trading on Monday, while Lek shares also rose by 12.7 per cent to trade at 101,500 tolars by mid-morning.

swissinfo with agencies

Key facts

The revised offer from Novartis for the Slovenian drug company, Lek, looks likely to be accepted.
The bid depends on the acquisition by Novartis of at least 51 per cent of Lek shares.
The friendly takeover would create a leading global player in generics.

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