Cablegate: Actavis Withdraws, Leaves Barr As Sole

VZCZCXRO7591
RR RUEHAST
DE RUEHVB #1143 2621330
ZNR UUUUU ZZH
R 191330Z SEP 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 6685
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ZAGREB 001143

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV HR
SUBJECT: ACTAVIS WITHDRAWS, LEAVES BARR AS SOLE
BIDDER FOR CROATIA'S PLIVA

REF: ZAGREB 815

1. SUMMARY: ACTAVIS PHARMACEUTICALS OF ICELAND
WITHDREW ITS OFFER FOR THE TAKEOVER OF PLIVA,
LEAVING NJ-BASED BARR AS THE ONLY BIDDER FOR THE
CROATIAN PHARMACEUTICAL COMPANY AT $140 (820 KUNA)
PER SHARE. BARR'S OFFER, WHICH EXPIRES OCT. 11, IS
ONLY VALID IF THE COMPANY PURCHASES MORE THAN 50
PERCENT OF PLIVA SHARES. END SUMMARY

2. ACTAVIS OFFICIALS SAID THE COMPANY DOES NOT
INTEND TO RAISE ITS OFFER FOR PLIVA TO MATCH THE
LATEST OFFER FROM BARR AND NOTIFIED THE CROATIAN
FINANCIAL SERVICES SUPERVISORY AGENCY (HANFA) THAT
IT WAS WITHDRAWING ITS OFFER ON MONDAY. ACTAVIS'
LAST OFFER WAS $135 (795 KUNA) PER SHARE COMPARED TO
BARR'S $140 PER SHARE. ACTAVIS CONFIRMED IT CONTROLS
20.8 PERCENT OF PLIVA SHARES THROUGH DIRECT
OWNERSHIP AND OPTION AGREEMENTS. THE COMPANY ALSO
SAID IT WOULD CONTINUE TO FOLLOW THE PROGRESS OF THE
SALE OF PLIVA AND RESERVED THE RIGHT TO APPLY TO RE-
ENTER THE PROCESS.

3. THERE ARE AT LEAST TWO POSSIBLE EXPLANATIONS FOR
ACTAVIS' WITHDRAWAL: ONE IS THAT ACTAVIS NEEDS TO
COMPLETE TWO OTHER ACQUISITIONS BY YEAR END AND
NEEDS TO DIVERT ALL OF ITS FINANCIAL AND MANAGEMENT
RESOURCES TO THOSE TRANSACTIONS. ANOTHER THEORY IS
THAT ACTAVIS PLANS TO RETURN AFTER PURCHASING A
SUBSTANTIAL AMOUNT OF SHARES FROM ONE OF THE
INVESTMENT FUNDS THAT HOLDS THE BULK OF PLIVA STOCK.
THIS WOULD MAKE IT DIFFICULT FOR BARR TO PURCHASE
THE 50 PLUS ONE SHARE NEEDED TO ACQUIRE PLIVA AND
LEAVE THE DOOR OPEN FOR ACTAVIS TO SELL ITS ENTIRE
STAKE AT A CONSIDERABLE PROFIT.

4. BARR OFFICIALS HAVE TOLD US THEY ARE CAUTIOUSLY
OPTIMISTIC THAT THEIR BID WILL BE SUCCESSFUL AND
POST IS PLEASED TO SEE THIS TRANSACTION CONDUCTED
WITH TRANSPARENCY.

BRADTKE

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