Innovata asks SkyePharma to turn tables and bid for it

Innovata, the ambitious manufacturer of inhalers which made an audacious approach for its bigger rival SkyePharma last month, is now asking the company to turn the tables and mount a bid for Innovata.

The twist comes as SkyePharma directors meet this week to review the early progress of a strategy review that they hope will lead to an auction of the company.

SkyePharma shares have risen in anticipation of it being taken over by private equity or a large pharmaceuticals company, but Innovata is believed to be confident that it can seal a deal and is putting pressure on SkyePharma to move quickly.

It is understood to be asking for the deal to be structured as a SkyePharma bid for Innovata, but one where the smaller company's management will emerge with the key positions.

Advisers believe that Innovata's management - led by the chairman Ian Kent and chief executive Kieran Murphy - is more respected in the City than Ian Gowrie-Smith, the chairman of SkyePharma. Michael Ashton, SkyePharma's chief executive, is already planning to retire, after failing to meet promises on a licensing deal with a big pharmaceuticals company and being forced into a £35m rights issue to rescue an important drug trial.

Innovata shares have soared in the nine months since Messrs Kent and Murphy secured shareholder support to oust the existing management of what was then called ML Laboratories. They believe they could achieve similar cost cuts and site rationalisations at SkyePharma. Their pitch comes amid reports of investor demands that Mr Gowrie-Smith consider his position in the light of the rights issue.

Investors are also nervous that a takeover of SkyePharma will be complicated by "change of control" clauses in a string of financial deals.

One source close to Innovata said the company was pressuring the non-executives at SkyePharma to move quickly.