Funding talks have held back Bioglan

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The Independent Online

Bioglan Pharma's embattled chairman, Terry Sadler, admitted yesterday that the drawn-out negotiations to acquire Bristol-Myers Squibb's skincare product range have hit Bioglan's underlying business.

Mr Sadler unveiled a new house broker yesterday to replace ABN Amro, which quit after a row with Mr Sadler over how the acquisition should be funded. Lehman Brothers, which has been close to Bioglan for some time, is believed to have decided against stepping in to help the troubled company, and the role went to Goldman Sachs instead.

Goldmans does not yet have a research analyst who covers Bioglan, but rivals were yesterday speculating that the giant investment bank's expertise in convertible bond issues landed it the job. The issue of £200m of debt convertible into shares is now seen as the most likely method of paying the first tranche of money to Bristol-Myers Squibb.

Lehman Brothers, ABN Amro and others downgraded their forecasts for the current year's trading after speaking to Bioglan yesterday. The company is warning that first half results will show lower than expected sales of its branded skincare drugs.

Mr Sadler blamed the disappointing trading on the distraction of the acquisition talks: "We have been pretty busy these last few months as the negotiations have taken a lot of management time."

The acquisition of 20 skincare products from Bristol-Myers Squibb will double Bioglan's revenues.

Goldman Sachs' first priority will be to smooth relations with Bristol-Myers Squibb, which are said to have become strained as the Bioglan side fought among themselves over how to fund the £500m deal.

Bioglan shares rebounded 10.5p to 216.5p yesterday.