Tuesday 12 December 2017

Warner boss King set for €33m buyout windfall

Roisin Burke

ONE of Ireland's richest men stands to win a third multimillion euro fortune from the sale of the drugs company empire he helped build up.

Chamber music-loving former university lecturer John King could get €33m for his stake in speciality drug-maker Warner Chilcott, which has revealed it is in talks with potential buyers.

King's 1.38m shares would be worth €23m by Friday's €17 share price, but could net him much more than that if a €24 a share offer is made by a big pharma player, as has been rumoured to be a possibility. That would leave King quids-in by more than €33m.

Astrazeneca and Bayer are names mooted to be interested, along with private equity suitors.

Headquartered in Dundalk, Co Louth, Warner Chilcott is a cash-rich $5.4bn Nasdaq company that makes birth control and acne drugs. It said last week that it was "exploring strategic options" including early talks with prospective buyers and has hired Goldman Sachs to advise.

Former chairman and board member King was instrumental in growing the company from when he joined it in the Seventies.

A buyout would be third time lucky for King. He made around €50m in 2001 through a sale of a stake in Galen, as Warner Chilcott was previously called. Then just three years later he bagged about €60m more when Warner Chilcott was bought by investors including JP Morgan and Credit Suisse.

First quarter results issued on Friday showed a profit of €86m, up from an €18m loss for the same period in 2011.

There were revenue declines due to weak sales of its key osteoporosis drug Actonel, which have dropped by 37 per cent during the first three months of this year due to its European patent expiring.

This will continue to be an issue for the company, analysts say, predicting that sales will fall 15 per cent in the next two years as patents expire for its best-selling drugs, Actonel and Loestrin 24 FE and competition from generic products increases.

However, the company's cash-rich status may appeal to buyers, it has been suggested.

Shares soared 27 per cent to a nine-month high last week following the drug-maker's admission that it was exploring its options and holding talks with buyers. Shares were at $21.4 on Friday afternoon.

The company may also be considering paying a dividend as an alternative to a sale.

A former Queen's University lecturer, Isle of Man resident King is a sponsor of chamber music ensemble Camerata Ireland, along with former Bank of Ireland boss Mike Soden, United Drug chairman Ronnie Kells and ex-CRH director Terry Neill.

Warner Chilcott did not return calls requesting comment. Bayer and Astrazeneca declined to comment.

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