Fisons seeks advice to fight off bid

MAGNUS GRIMOND

Fisons is locked in talks with advisers SBC Warburg, NatWest Securities and Cazenove this weekend in an attempt to put together a defence to the unwanted pounds 1.7bn bid from Rhone-Poulenc Rorer.

Under Takeover Panel rules, the company has until a week on Monday to produce a document and the timetable is likely to go to the wire.

The extra time could allow the group to bring forward interim results, due on 12 September, and use them as the centrepiece of its defence.

The company is also thought to be close to sewing up a deal to sell its laboratory supplies business, which has been up for sale for some time.

But the indications are that Fisons is still struggling to find a white knight which would finally see off RPR, the US drugs arm of French chemicals group Rhone-Poulenc.

On Thursday, the German chemicals and pharmaceuticals group BASF, ruled itself out of the running for the British group and the indications are that Fisons' search for a saviour has yet to bear fruit.

The stock market's waning hopes for another bidder is reflected in the share price, which soared 71.5p to 264.5p after the bid was announced, but has since slipped back to 255.5p, up 0.5p yesterday.

The moves came as US analysts suggested that cost cuts of pounds 50m-pounds 200m could result from merging Fisons' US operations with those of RPR. The main area of overlap is in the two groups' salesforces, where job cuts are likely.

Fisons' 300-strong team compares with 600 involved in the respiratory area at RPR, although not all are involved in asthma allergy, which is the British group's main area of strength.

RPR refused to comment on likely cost savings, but observers suggest the final figure will be nearer the bottom end of the indicated range.

Meanwhile, Roche Holding, the giant Swiss drugs group, yesterday demonstrated the benefits of pharmaceutical mergers, reporting higher-than-expected profits on the back of last year's $5.3bn acquisition of Syntex of the US.

The group announced an 18 per cent rise in first-half net profits to Sfr1.91bn (pounds 1.02bn), although sales nudged ahead only 2 per cent to Sfr7.49bn. Analysts had been forecasting net profits only 10 to 15 per cent higher.

Roche initiated a restructuring programme aimed at slashing 5,000 jobs across the group as part of a restructuring of its main drug division after the Syntex merger. This helped to boost operating margins from 21 to 24 per cent in the first half.

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