War of words erupts over 'slow' Fisons

THE pounds 1.7bn battle for Fisons turned acrimonious this weekend after the bidder, Rhone-Poulenc Rorer of the US, accused its prey of being "the slowest" company it had ever dealt with.

The allegation brought a stinging riposte from the Fisons camp. One highly placed source there claimed it was RPR, not Fisons, which had dragged its feet over a joint venture between the two companies in Europe.

RPR said Fisons was incapable of delivering on its planned strategy of growing by acquisition, licensing deals and other joint ventures because suitable deals were hard to find and Fisons was slow to negotiate them. Rob Cawthorn, chairman of RPR, said "very long discussions" were "one of the hallmarks of dealing with Fisons".

His chief executive, Michel de Rosen, said: "We've done dozens of deals, but Fisons has been, of all the companies we dealt with, the slowest."

Fisons reacted angrily. One source said he found it "staggering" that RPR could attack Fisons when only a few months earlier the company had had to complain about RPR's dilatoriness in a memo to Mr Cawthorn.

As the battle of words erupted, Fisons was trying to drum up a contested auction for itself. It and its merchant bank adviser, SBC Warburg, hope to attract a white knight to start a bidding war. According to the Fisons source: "We don't have any hang-ups about selling. The issue is very much price. RPR's pounds 2.40 offer is totally inadequate."

The source continued: "We've had a huge number of calls. I would expect a lot of companies over the next few days will be thinking very hard."

Zeneca, Merck, Astra, Ciba-Geigy, Sandoz and Schering Plough were all mooted as possible white knights. But the consensus among analysts is that none will actually step in.

Alex Isaac, drugs analyst with stockbroker Panmure Gordon, said a counter- bid was unlikely, although Fisons would try to talk up the price.

The company might be able to wrest an extra 20p a share from RPR, but the price was fairly full, another analyst said. It looked fair compared with other recent drugs deals. Moreover, Fisons ought to be more lowly valued because it had no research and development arm and no "pipeline" of future products.

Mr Cawthorn was sceptical about white knights coming in: "Will they? At higher than this price? We'll see."

Mr de Rosen accused the Fisons chief executive, Stuart Wallis, of underestimating the difficulty of clinching deals with other drugs companies: "It's much easier to sell a business than to buy a business, especially in pharmaceuticals."

Mr Wallis is credited with doing a good job of slimming Fisons down to its core business of drug sales and marketing. But stage two of the strategy - growing the drugs business with joint ventures and acquisitions - has barely begun. "It's unfortunate they've been caught with their pants down,'' said Ms Isaac of Panmure Gordon.

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