The private equity arms of CSFB and JP Morgan looked set to clinch the battle for Warner Chilcott yesterday, after recruiting a rival bidding team to back their £1.62 billion (€2.3 billion) offer.
CSFB and JP Morgan said US private equity firms Bain Capital and Thomas H Lee had joined their Waren Acquisition bid vehicle, which last week agreed a deal to buy Warner Chilcott for 862p a share. Bain and Thomas H Lee had been working with private equity group Carlyle on a possible challenge but threw in the towel and began talks with Waren Acquisition after the group announced its recommended share offer.
A third consortium comprising the private equity arm of Goldman Sachs and buyout firms Blackstone and Texas Pacific has also been pursuing the Craigavon-based company.
Weekend newspaper reports said this team had been prepared to pay 865p a share for the firm, but that it missed the deadline for the auction.
Sources close to the situation say the Goldman team may now be deterred from challenging Waren's bid because it would have to cover the cost of a break fee of £17 million. In addition, Warner Chilcott has agreed to let Waren Acquisition match any competing offer, making it even harder for the Goldman-led team. Shares in Warner Chilcott, which is prized for its strong cash-generation and expansion opportunities, have traded as high as 875p on hopes of a bidding war.
The stock closed unchanged at 864p last night.
