Carlyle ups bid for inhaler firm Vectura, trumping tobacco giant Philip Morris

  • 8/6/2021
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US private equity firm Carlyle has made an improved £958m takeover offer for British inhaler maker Vectura, trumping an earlier bid from tobacco company Philip Morris International that had alarmed medical experts. Carlyle said on Friday it would offer 155p a share for Vectura, higher than its previous offer of 136p in May and outbidding a 150p offer from Marlboro cigarettes maker Philip Morris International (PMI) last month. Vectura bosses recommended that shareholders vote in favour of the improved Carlyle offer, and withdrew its previous advice that they approve the PMI offer. Doctors, health charities and politicians had raised serious concerns about prospect of a big tobacco company taking over a firm that makes products that treat conditions caused by smoking. “The Vectura directors note the reported uncertainties relating to the impact on Vectura’s wider stakeholders arising as a result of the possibility of the company being owned by PMI,” Vectura said. Anti-smoking campaigners and politicians had criticised Vectura for proposing to sell up to a tobacco company. The chief executives of Cancer Research UK, Asthma UK, the British Lung Foundation and Action on Smoking and Health wrote to the business secretary, Kwasi Kwarteng, and the health secretary, Sajid Javid, calling on the government to block the deal. The charities said there was a “real prospect” that PMI would use Vectura to “legitimise tobacco industry participation in health debates within the UK”. “This must not be allowed to happen. In addition, there is huge unease that a tobacco company could profit from treatments for conditions such as chronic obstructive pulmonary disease and asthma, illnesses made far more prevalent because of the marketing tactics used by tobacco companies, including PMI,” the letter said. The charities said PMI has a “long history of subverting tobacco control policies for its own financial gain, funding pro-tobacco research and discrediting independent scientific evidence”. They also said PMI’s “move into health circles would create considerable conflicts of interest at all levels” and threaten the “important health-related work that Vectura currently undertakes”. Vectura, which is based in Wiltshire, south-west England, makes inhalers and nebulisers that help patients breathe in medication. Its customers included Novartis and GlaxoSmithKline. The shadow health secretary, Jonathan Ashworth, and the shadow business secretary, Ed Miliband, had also called on Kwarteng and Javid to intervene to prevent the sale to PMI, saying medical research charities were “horrified” by the prospect and urged the government to “work to ensure the future of this vital company is not in any way at risk”. PMI had said its offer to buy Vectura was “part of a natural evolution into a broader healthcare and wellness company” to “accelerate the end of smoking”. Vectura’s shares rose 6.5% to 164p.

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