REYKJAVIK, Iceland, Aug. 31, 2006 (PRIMEZONE) -- Actavis Group (ICEX:ACT), the international generic pharmaceutical company, today announces that it has increased its offer to acquire the Croatian pharmaceutical company, PLIVA d.d (LSE:PLVD) (ZSE:PLVA-R-A), to HRK795 per share in cash. The revised offer represents an increase of 10.0% over Actavis' previous offer of HRK 723 per share and is 7.0% higher than the competing offer of HRK743 per share made for PLIVA by Barr Pharmaceuticals Inc. The increased offer values the total issued share capital of PLIVA at approximately US$2.5 billion. In addition, Actavis also confirms that it now controls a total of 20.8% of PLIVA's share capital through a combination of share ownership and options to acquire shares.
Under the terms of Actavis' increased offer, PLIVA shareholders will receive HRK795 per share in cash, in addition to the HRK12 per share dividend determined by PLIVA, representing a total cash payment of HRK807 per share. The funds required for Actavis' offer are fully committed through financing arranged by Actavis' bankers, JP Morgan, HSBC, UBS and Landsbanki consist of a mixture of equity, loan facilities and a preferred security. In connection with the offer, Actavis has also secured shareholder approval for an equity increase of 300 million shares.
The Board of Actavis believes that its revised offer represents a full and fair price for PLIVA and provides PLIVA shareholders with an immediate and tangible return on their investment. In addition, the Actavis offer provides the following significant economic and industrial benefits for PLIVA's business and for the Croatian economy:
-- Actavis intends PLIVA's Zagreb headquarters to become a central
part of the combined business, responsible for overseeing the
enlarged Group's operations in Central and Eastern Europe.
-- Actavis plans to consolidate its manufacturing facilities
worldwide and transfer production to Croatia from other existing
sites to take advantage of the high-skilled manufacturing
environment and lower costs. As a consequence, Actavis plans to
maintain and further expand PLIVA's production facilities in
Croatia, as well as to increase PLIVA's present production
utilization levels. This will facilitate the creation of
additional jobs in Croatia, bringing significant benefits to the
local economy.
-- Actavis intends to preserve and develop the PLIVA brand in all of
its key markets and does not intend to divest any of the existing
PLIVA operations.
-- Actavis is planning additional investment in PLIVA's research,
development and production facilities and considers the role of
PLIVA employees and management critical for the realization of
its business strategy. The combination with Actavis will enable
PLIVA employees to develop professionally within Actavis' global
footprint and benefit from Actavis' existing infrastructure.
-- Actavis will seek a stock listing in Zagreb, as a means of
encouraging continued support from the Croatian investment
community.
Actavis believes that it is able to offer a significantly more attractive offer to PLIVA's stakeholders than has been presented by Barr, based on the following considerations:
-- Actavis' sphere of operations has long included Central and
Eastern Europe, and as such it has a thorough understanding and
strong operating track record in these markets, which it will use
to improve PLIVA's operating performance and bring growth to its
business. In contrast, Barr has never operated outside of North
America.
-- Actavis has a broad existing infrastructure across both Western
and Eastern Europe and through its combination with PLIVA will
achieve critical mass in many markets where PLIVA's stand-alone
businesses today have a relatively small presence. The
achievement of critical mass is vitally important in managing the
volatile pricing environment inherent in the European generic
pharmaceutical market and will further enhance the enlarged
Group's capability to do so.
-- Actavis will be able to deliver its strong pipeline of over 300
products, far exceeding that of Barr, into PLIVA's distribution
network, generating significant growth synergies for the enlarged
Group. Further synergies can be gained from leveraging Actavis'
extensive distribution network in Europe to sell PLIVA's
portfolio of products.
-- In contrast to Barr, Actavis has an excellent track record in
acquiring and integrating businesses in the complex and
heterogenous European generics market quickly and with a high
degree of success. Actavis has successfully integrated more than
20 acquisitions in the last seven years.
Financial Impact of the Increased Offer Actavis management believes that the combination of the two businesses can generate synergies of at least EUR50 million in 2007, EUR100 million in 2008 and the same amount each year thereafter. The impact of the increased offer on Actavis' earnings per share, prior to amortization of purchased intangibles, is expected to be neutral in 2007, positive in 2008 and strongly accretive from 2009 onwards Furthermore, management expects to see EBITDA margins to improve from 21-22% of revenue (the current guidance for Actavis in 2007) to 23% in the first full year of 2007.
HANFA Approval
The Croatian Financial Services Supervisory Board Agency (HANFA) has approved Actavis' increased offer and in accordance with Croatian Takeover Law, Actavis anticipates that its formal offer will be published in the Official Gazette and in major Croatian newspapers in the coming days. This will initiate the formal tender process, which takes a minimum of 30 days and up to 60 days from the date that a competing bid is approved for publication by HANFA. Completion of the tender offer is conditional only upon Actavis receiving acceptances that result in it holding more than 50% of PLIVA's outstanding issued share capital.
Commenting on today's announcement, Robert Wessman, CEO of Actavis, said:
"Our increased offer underlines our commitment to bringing PLIVA into the Actavis Group. We believe very strongly that the combination of our two businesses will create one of the most exciting companies in our industry and a solid platform from which to achieve substantial future growth.
"Our offer overwhelmingly represents the best option for all of PLIVA's stakeholders: shareholders will receive a full and fair return on their investment as well as an opportunity to reinvest in the new entity following our listing on the Zagreb Stock Exchange; employees will enjoy greater opportunities from our increased investment and by becoming part of a global Group with an excellent track record in integrating businesses and resolving operational issues; and the Croatian economy will benefit from the additional manufacturing and employment opportunities that we will bring to the region.
"We look forward to working with the Supervisory Board of PLIVA to bring about the combination of our businesses and building one of the world's leading generic pharmaceutical companies."
About Actavis Group
Celebrating its 50th anniversary this year, Actavis is one of the world's leading generic pharmaceutical companies specializing in the development, manufacture and sale of generic pharmaceuticals. Based in Iceland, the company has operations in over 30 countries, with over 10,000 employees. The company's market cap is approximately EUR2.3bn (US$3 billion) and it is listed on the Iceland Stock Exchange. Actavis expects 2006 sales to total EUR1.4bn, with approximately one-third of these sales coming from the United States, the company's single largest market. More information about Actavis can be found at www.actavis.com. http://hugin.info/134004/R/1072680/183601.doc