Actavis bows out of bidding for Pliva leaving field open for Barr's offer to go through

Acquisitive Iceland-based generic drugs group Actavis is pulling out of the battle to acquire the Croatian Pliva group, saying that it will not increase its 795 kunas per share offer for the company, after US rival Barr Laboratories raised its bid to 820 kunas a share (Marketletter September 18).

Actavis said it had advised the Croatian Financial Services Supervisory Agency of its decision and asked it to release it from the guarantee it has provided. It confirmed that it controls around 20.8% of Pliva's outstanding stock through direct ownership and option agreements and that it will continue to follow closely the progress of the bidding for the Croatian firm, and reserves the right to apply to re-enter the process. Pliva issued a statement saying it had been advised of the situation and noted that the only remaining offer currently available for acceptance by shareholders was that from Barr.

Bruce Downey, Barr's chief executive, has consistently said that his firm is committed to completing the acquisition of Pliva, which would make it the global third in generics. However, quoted by the International Herald Tribune, Frances Cloud, an analyst at Nomura Code in London, UK, who follows Pliva, says that "this is going to be an absolutely pyrrhic victory for Barr...they're overpaying for an asset, the quality of which they are dramatically overestimating and have no ability to manage."