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Higher bid expected for Fisons

By Patrick Hosking

RHONE-POULENC RORER, the American-based drugs group, is expected to lift its hostile bid for Fisons by around pounds 100m to pounds 1.8bn next week.

Advisers to RPR believe another 15p to 20p on the 240p-per-share offer price will be enough to win control of the company.

Next Friday is Day 46 of the bid, the last day under takeover rules on which RPR can lift its offer unless a rival bid is tabled.

Fisons shares closed the week at 257.5p, indicating that the stock market believes RPR will have to sweeten its offer a fraction.

But sentiment has moved away from Fisons over the last few weeks, as it became apparent it has been unable to find a white knight. Further delay in its attempt to sell its scientific instruments division has also disappointed shareholders.

On Friday, Fisons, advised by SBC Warburg, unveiled the final plank of its defence, announcing fresh co-operation deals with Ciba-Geigy, Magainin Pharmaceuticals and 3M. It also forecast operating profits in the pharmaceutical division of at least pounds 100m and promised a final dividend of 3p, making a total for the year of 5p.

RPR, advised by Lehman Brothers, dismissed the new defence, arguing that the new joint ventures would not add meaningfully to sales or profits before the 21st century.