Shire To Merge With Richwood In $186m Takeover

The UK biotechnology group Shire Pharmaceuticals has announced it is tomerge with Kentucky, USA-based Richwood Pharmaceutical, in a $185.7 million takeover agreement. The acquisition is subject to shareholder approval following an Extraordinary General Meeting to be held on August 20.

The agreement allows for the aggregate sum to be satisfied by $145.8 million in 37.8 million Consideration Shares, up to $15 million in cash and options over 7.2 million Ordinary Shares with a current value of $24.9 million. With profits at Shire forecast to rise to L17 million ($27.7 million) this year from L1.7 million last year, this price is high but not excessive, according to analysts talking to the Financial Times. Under the terms of the deal, Shire has agreed to seek a US listing for its Ordinary Shares in the form of American Depository Receipts by October 15, 1998, subject to certain conditions.

Second Acquisition In Six Months This latest agreement marks Shire's second acquisition in six months. In February this year the group announced plans to acquire the drug delivery group Pharmavene for $170 million, and completed the action the following month (Marketletter March 31).