- Holders of around 75% of Vectura shares support the tender
- PMI needed 50% backing to get deal done
- Extends deadline for other holders to tender their shares by September 30
Sept. 16 (Reuters) – Cigarette maker Philip Morris (PMI) (PM.N) on Thursday landed its £ 1.1 billion takeover of asthma inhaler maker Vectura (VEC.L), winning the support from the shareholders of the British company despite the concerns of health professionals.
Vectura shareholders have decided to accept PMI’s 165 pence per share offer, with almost 75% support for the transaction.
The purchase of the London-listed inhaler maker is part of Philip Morris’ long-term plan to develop “smoke-free” products and become a “broader health and wellness” company.
But it angered health groups such as Asthma UK and the British Lung Foundation who questioned whether a tobacco group should own a business that cures respiratory illnesses caused by cigarettes.
PMI CEO Jacek Olczak argued that the acquisition of Vectura is a critical part of its strategy to move the company “Beyond Nicotine”. Read more
He told the Telegraph last month that opponents of the deal were “not interested in progress” and accused them of “settling old scores” with the tobacco industry.
Olczak said Thursday that PMI will provide scientists at Vectura with the resources and expertise to achieve its goal of generating at least $ 1 billion in net revenue from “Beyond Nicotine” products by 2025.
Meanwhile, Asthma UK and the British Lung Foundation have said they have sent a letter urging the government to look into any conflict of interest issues.
The letter was co-signed by 35 charities, public health experts and clinicians.
“There is now a very real risk that Vectura’s Big Tobacco deal will lead the cigarette industry to exert undue influence on UK health policy,” said Sarah Woolnough, Managing Director of Asthma UK and the British Lung Foundation.
“We call on the government to honor its commitment to the World Health Organization’s Framework Convention on Tobacco Control to prevent this from happening,” Woolnough added.
PMI has received regulatory approvals for the transaction and following the public tender process, its offer can no longer be withdrawn.
While the company has been given the 50% threshold to make its offer unconditional, it has yet to achieve the 75% shares needed to remove Vectura from the listing.
PMI said it was extending its offer until September 30, to give Vectura shareholders time to accept its proposal.
“Philip Morris does not ignore the elephant; it makes us all watch carefully. The discomfort is good, it tends to bring about the change, but care must be taken to ensure that the promised change occurs and that there are no detours on the journey, “said the financial analyst of ‘AJ Bell, Danni Hewson.
($ 1 = 0.7234 pounds)
Reporting by Pushkala Aripaka and Siddharth Cavale in Bengaluru; Editing by Elaine Hardcastle
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