Stada surges as it backs Cinven, Bain Capital offer

Shares in Stada Arzneimittel surged on Monday after the German drug maker backed an offer from Bain Capital and Cinven at €66 a share, valuing the group at around €5.32bn.

Stada said the offer submitted by the private equity consortium "provides the most attractive overall combination" and takes account of its long-term interests "the most effectively".

"The Executive Board, acting with the approval of the Supervisory Board, has decided to support the offer and forgo the existing standstill agreement with Bain Capital and Cinven."

Under the terms of the offer, shareholders would receive €65.28 plus a dividend of €0.72 a share. This represents a premium of around 48.9% on the last unaffected closing share price on 9 December, 2016, and a premium of approximately 19.6% on the volume-weighted average share price over the past three months.

Stada said it has signed an investor agreement whereby Cinven and Bain have commit to "extensive protection provisions" for its employees and its sites, as well as to the continuation of its growth strategy.

"Among other things, a contractual agreement has been reached to the effect that Bain Capital and Cinven will strengthen Stadaa’s position as a globally active pharmaceutical company and support its growth strategy in order to contribute to a long-term increase in the company’s value. Moreover, Bain Capital and Cinven have agreed to provide both financial and strategic support for possible acquisitions to expand the product portfolio and to tap new growth markets."

At 0922 BST Stada shares were up 11% to €64.71.