Shire in the sights of Serono

Swiss biotech in $10bn takeover push
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The Independent Online

Swiss biotechnology group Serono is gearing up its $10bn (£5.5bn) acquisition drive, which could include a tilt at pharmaceutical giant Shire.

"Management has a clear, renewed sense of urgency to do a deal," said ABN Amro fund manager Arnoud Diemers, who recently spoke with management. Investors have been pressing the company to deliver on the pledge it made in April to hit the acquisition trail after it failed to sell itself.

Speculation has begun to centre on a select group of targets, of which Shire is the largest. "Shire would be the best fit," said one banker.

Serono, which is run by Ern-esto Bertarelli, Switzerland's richest man, was outbid by Shire in 2004 for Transkaryotic Therapies. An attempt to acquire Shire would probably be motivated, sources said, by the idea of getting access to Transkaryotic products.

Investors approved a measure in April to allow Serono to raise a $5.6bn war-chest, on top of its cash pile and credit lines, to fund purchases. Shire has a £3.7bn market value.

Mr Bertarelli has said in the past he would prefer several smaller acquisitions to a large deal, though a recent management shuffle has raised hopes that the strategy may be flexible.

Leon Bushara, the corporate strategy head, left last month after more than a decade at the company, with deputy chief executive Jacques Theurillat taking up the post. Goldman Sachs, which failed to find a buyer for Serono, is leading advisers now sizing up its buying options.

Genmab, the Danish biologics group with which Serono already has a joint venture on a treatment for T-Cell lymphoma, is another company rumoured to be in its sights.

"[Serono] needs to be seen to be doing something, but the problem is that there isn't that much out there," said Samir Devani of Nomura Code Securities. "Genmab is probably the most sensible candidate for them."

Smaller Swiss rivals Actelion and Basilea Pharmaceutica are also being touted as potential targets. So is Organon, a unit of Akso Nobel.

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