MBK’s proposed buyout of pharmaceutical company uncertain

The Asian private equity firm’s S$357 million bid for AsiaPharm faces opposition from minority shareholders.

Fund manager Templeton Asset Management is set to block the S$357.4 million ($259.6 million; €164.1 million) buyout bid for AsiaPharm, a Singapore-listed specialty pharmaceutical group, made by MBK Partners last month.

US fund manager Templeton holds a stake of about 4.11 percent in the company.

Mark Mobius, executive chairman of Templeton Asset Management, told PEO Templeton was opposed to the bid as it was “not happy with the price being offered” and said that the offer should have been at least double of what was offered.

Other managers such as US-based Pope Asset Management and UK-based Martin Currie Investment Management are also opposed to the proposed buyout. These two firms and Templeton hold a total stake of greater than 10 percent in AsiaPharm, according to Mobius.

MBK would need acceptances of more than 90 percent to de-list AsiaPharm.

The buyout group is making the acquisition through one of its units, LuYe Pharmaceutical International Company. It is offering shareholders S$0.725 per share, 14.2 percent more than the last transacted share price before the offer document was released on 4 February. The offer closes 24 March.

MBK has already received irrevocable undertakings from AsiaPharm’s executives who own 44.17 percent of the shares, to accept its offer.

Templeton bought 20 million shares of AsiaPharm at S$0.8032 per share for S$16.1 million in May 2006, according to a statement released by AsiaPharm at the time of the investment.