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Fisons sells off more assets to block takeover

pounds 600m in disposals may lure white knight
Fisons yesterday raised the stakes in its attempt to fend off the unwanted pounds 1.7bn bid from Rhone-Poulenc Rorer by announcing a deal to sell most of its laboratory supplies division to Fisher Scientific of the US for pounds 201m. With the disposal of the remainder of the business and the scientific equipment side expected to be finalised next month, the drugs group has now almost completed its divestment programme and netted more than pounds 600m from disposals since Stuart Wallis came aboard as chief executive a year ago.

The City saw the latest deal as improving Mr Wallis's chances of extracting a higher price from RPR or making Fisons more attractive to a white knight. The shares added 2p to 257.5p yesterday, keeping the price well clear of the bidder's 240p-a-share cash offer.

In a statement Mr Wallis said: "In concluding this deal with Fisher Scientific, Fisons has achieved its third major divestment within six months. This effectively completes Fisons' disposal programme and creates a focused pharmaceutical company with a clear strategy for profitable growth."

Asked later about the possibility of agreeing a higher offer with RPR, he reiterated: "As I have always said, I have absolutely no problems with anyone coming along to us and the board and discussing ways of adding value to Fisons." But he stressed it was "up to RPR, if they have a continuing interest in Fisons, to come along to us and tell us what that increased interest is".

Mr Wallis said the defence document would be published on Monday and left open the possibility that interim results, scheduled for 12 September, might be brought forward. "I think we will be able to mount a very robust defence," he said. James Culverwell, of Merrill Lynch, is expecting the figures to show profits have risen from pounds 30.4m to pounds 33m in the six months to June.

RPR welcomed news of the latest deal, which had always formed part of the French-owned US drugs group's plans for its British rival. A spokesman said it was "encouraging" that Fisons had managed to find a buyer for the business, although it was difficult to tell whether full value had been achieved, he added.

In an unusual show of unanimity, analysts were also generally favourably impressed by the latest deal. "They're demonstrating that they're getting on with sorting themselves out and delivering shareholder value, and positioning themselves to give an alternative to the RPR offer," said Merrill Lynch analyst, James Culverwell. At Panmure Gordon Alex Isaac said the lab supplies sale should increase Fisons' cash pile to between pounds 400m and pounds 500m, which should in turn increase the price of the whole group.

The $310m (pounds 201m) that Fisher Scientific International is paying for the two businesses being acquired, Curtin Matheson Scientific in the US and Fisons Scientific Equipment in the UK, was initially viewed as disappointing by analysts. But Fisons said the sale of the remaining business, J&W Scientific, a US-based world leader in the manufacture of mass spectrometry columns, had attracted "an incredible number of offers". Market estimates yesterday were that the auction of the business, likely to be completed in the next week or two, could bring in pounds 30m to pounds 40m, taking total proceeds from lab supplies close to pounds 250m.

Curtin Matheson and Fisons Scientific together turned over $750m (pounds 485m) and reported operating profits of $28m (pounds 18m) in the year to last December, although Mr Wallis said there had been "considerable pressure" on the results for this year. The pounds 202m sale of Fisons' scientific instruments operation is expected to go ahead next month.