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STADA Arzneimittel AG (STAGn.DE) Board Would Consider "High'" Takeover Offer  
1/11/2013 10:25:28 AM

Stada Arzneimittel AG (SAZ), the German generic-drug maker that spent more than 250 million euros ($331 million) on acquisitions last year, said it expects to draw takeover offers from rivals seeking to expand in Europe. “In Europe, we have a sweet spot in Russia” and “we are doing a very good job” in businesses including consumer health care, Markus Metzger, the Bad Vilbel, Germany-based company’s director of investor relations, said yesterday at the JPMorgan Chase & Co. health-care conference in San Francisco. Companies that don’t have those businesses in Europe “may look at buying us,” he said. Stada may be a target of Sun Pharmaceutical Industries Ltd. (SUNP), India’s largest drugmaker by market value, which was considering acquisitions in Europe, including the German drugmaker, people familiar with the matter said in August. Sun, maker of generic Flomax and Plavix, seeks to add products and extend its geographical reach, Chairman Israel Makov said in a Dec. 31 interview. Metzger declined to comment specifically on Sun’s potential interest or on other possible acquirers. “It’s finally a matter of price,” Metzger said during a question-and-answer session at the conference. “It’s not in our hands, we have a 100 percent free float,” he said. Stada would be worth about 3.7 billion euros, based on the 10.3 times earnings before interest, tax, depreciation and amortization median price of eight generic drugmaker acquisitions over the past three years, according to data compiled by Bloomberg. The drugmaker probably had EBITDA of 357 million euros in the year ended Dec. 31, based on the average of 22 analyst estimates gathered by Bloomberg. Stada rose 0.8 percent to 25.83 euros at 9:22 a.m. in Frankfurt trading, giving the company a market value of 1.5 billion euros. Stada’s share price is “depressed” partly because of the European debt crisis and past writedowns on its Serbian business, Metzger said. “We are still looking cheap,” Metzger said. “We had some negatives. Credibility is slowly coming back. We are more stabilized in Serbia right now.” Metzger declined to specify a target price for the company and said it was “up to investment bankers” to gauge the value. “If anyone pays 50 euros, it’s going to be difficult to say no,” he said, referring to a per-share price.
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