The private equity firm Clayton, Dubilier & Rice is to increase its offer for UDG Healthcare to £2.7bn after major shareholders in the Dublin-based company opposed the first bid.
CD&R, which is also seeking to take over the UK supermarket chain Morrisons, is “considering a new and final offer” valuing the business at £10.80 a share, London-listed UDG said in a statement to the stock market.
UDG was forced to postpone an extraordinary general meeting to vote on the original deal, which had been scheduled for Friday, after CD&R’s initial £10.23-a-share offer in May resulted in shareholder opposition.
The board of UDG had recommended the initial offer but Allianz Global Investors, its largest shareholder, came out against the deal, saying the bid was “opportunistic and significantly undervalues UDG and its prospects”. According to media reports, the investor M&G was also against the level of the first offer but did not put out a public statement.
As a result, UDG postponed the extraordinary general meeting as the two sides resumed negotiations over a sweetened deal.
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