June 21, 2017 / 2:46 PM / 5 months ago

Low acceptances leave Stada bid down to the wire

FRANKFURT (Reuters) - Buyout groups Bain Capital and Cinven said they have been offered just over 41 percent of the shares in takeover target Stada (STAGn.DE), 26 points short of the required minimum with just one day before the offer expires.

The tender offer for the agreed 5.3 billion euro (4.67 billion pounds) deal at 66 euros per share runs through to the end of Thursday, June 22, and was made conditional on securing 67.5 percent of the shares in the German drugmaker.

The investors earlier this month lowered the minimum acceptance threshold from 75 percent and postponed the cut-off date by two weeks.

While German takeover rules bar Bain and Cinven from amending their offer a second time, they could make a renewed bid with Stada’s approval within a year of the first attempt failing.

Even though institutional investors typically tender shortly before the deadline, the bidders have grown increasingly uneasy about the slow uptake, sources close to them have told Reuters.

A relatively large 27 percent of shares are held by individual non-professional investors, many of whom are elderly, according to the sources.

Only about half of these retail investors are expected to tender, with the rest expected to ignore or forget letters from custodian banks informing them of the offer.

At a premium of 49 percent over the share price before initial reports emerged that a takeover was on the cards, the offer is widely regarded as attractive, after Stada organised a fiercely competitive auction between two buyout consortia.

Complicating things further for Stada’s suitors, index tracking funds that cannot tender, are seen as holding about 12 percent of the shares.

The sources said that Bain and Cinven are fearing that some of the abstaining shareholders might be speculating that a rival bidder is lying in wait.

Private equity firms Advent and Permira last month decided not to tie up with Shanghai Pharmaceuticals (601607.SS) to make a counter bid for Stada, sources told Reuters at the time.

Shanghai Pharmaceuticals said earlier in May it was weighing a counter bid.

Stada shares traded 0.4 percent lower at 1340 GMT.

Reporting by Alexander Huebner and Ludwig Burger; Editing by Harro ten Wolde and Elaine Hardcastle

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