(Bloomberg) -- Philip Morris International Inc. changed its bid for Vectura Group Plc to a takeover offer, meaning the maker of Marlboros will need fewer investors’ backing to win the battle for the U.K. asthma drug maker.
Philip Morris is abandoning the scheme of arrangement in order to increase the certainty of the acquisition, the company said in a statement Tuesday. The scheme requires 75% shareholder acceptances, whereas a takeover offer only needs more than 50% of investors to vote in favor, under U.K. takeover rules.
The firm will send its offer document to Vectura shareholders within 10 business days.
Philip Morris is in a takeover battle with private-equity firm Carlyle, and an auction procedure is due to kick off today at 5 p.m. London time that will determine how much each company is willing to pay for Vectura. The highest bidder isn’t necessarily the winner as shareholders will have the final say.
While Vectura has withdrawn its recommendation for the Carlyle offer made on Aug. 6, the company had described it as “well aligned” with its wider stakeholder objectives, and it also acknowledged reports of uncertainties related to the possible impact on stakeholders if the company were owned by Philip Morris.
Carlyle said at the time of its most recent offer that it has received “irrevocable undertakings in relation to voting in favor” of the acquisition from Vectura shareholders AXA Investment Managers UK, TIG Advisors and Berry Street Capital Management. They represent about 11% of the issued ordinary shares.
The switch could help increase Philip Morris’s chances of crossing the necessary threshold to succeed with its bid, even if more shareholders were to emerge that oppose its offer.
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