The cancer drug specialist Clinigen has agreed to a £1.2bn takeover deal from a London-based investment firm, becoming the latest big British company to be taken private.
Triton Investment Management has offered to pay 883p a share for the company, whose main product is the acquired cancer medicine Proleukin.
Clinigen, which is based in Burton-on-Trent, Staffordshire, said its board had recommended the offer to shareholders, which include the New York hedge fund Elliott Management, with a 7.6% stake.
The news sent Clinigen’s share price soaring by up to 15% in early trading, though they later settled at at 901p, up 10.2%.
Elliott declined to comment. It has been reportedly demanding a break-up of Clinigen, but never made its demands public – unlike the pressure it has applied to the drugmaker GSK and the energy firm SSE.
The hedge fund first publicly disclosed a 5.2% stake in Clinigen on 10 September when the share price was 659.5p – meaning it has made a significant gain on its holding since.
Clinigen does not develop medicines itself, but acquires the rights to medicines from drug developers, produces them via contract manufacturers, and distributes them around the world. A growing part of its business is offering services to other biotech and pharmaceutical firms, such as selling their drugs around the world and running clinical trials for them. The group works with 34 of the top 50 pharmaceutical companies.
There has been a flurry of private equity buyouts in recent months. The supermarket group Morrisons was bought for £7bn by the US firm Clayton, Dublier & Rice, which beat off SoftBank-owned Fortress Investment in a head-to-head auction.
David Cox, an analyst at the investment bank Panmure Gordon, has said that the takeover approach of Clinigen was inevitable after its shares fell earlier this year, when it warned sales of its cancer drugs would be lower than expected because of the coronavirus pandemic. This has mainly hit sales of Proleukin, which is given at hospitals as an IV drip or injection.
Clinigen, which employs more than 1,000 people in 14 countries, was created by Peter George from the merger of three healthcare businesses in 2010. He floated the company on the London stock market two years later. George cashed in part of his stake for £16.5m in 2016 but retained a 3% holding at the time. It is unclear whether he still owns Clinigen shares today.