UK generic drugs supplier Goldshield Group has seen its shares jump in recent weeks on the back of takeover approaches, including a possible management buyout led by its chief executive Rakesh Patel.
Goldshield’s acknowledgement of the possibility of a deal came after the UK Takeover Panel forced it to clarify press speculation that founder and former chief executive Ajit Patel was preparing a 370p per share offer.
While Goldshield did not rule out a potential bid by Ajit, who is not related to Rakesh Patel, the market did not think such an offer price would be forthcoming, with Goldshield shares trading at around 350p on June 26, valuing the company at £130m (US$250m).
Ajit stood down in 2007 to fight an SFO case brought against him for price fixing, which he finally won in December 2008 when the Court of Appeal refused the SFO grounds to appeal.
Other potential bidders include London-listed generic drugs producer Hikma Pharmaceuticals, which is based in Jordan, and GlaxoSmithKline.
Both Hikma and GlaxoSmithKline declined to comment on the situation, although a source close to the latter played down its bid interest.
Gleacher Shacklock is advising Goldshield, while Numis Securities and Panmure Gordon are acting as the company’s brokers.
Goldshield’s board believes the company will face a tough economic environment in the short term, although its full-year revenues came in ahead of analyst expectations. Pre-tax net profits jumped by 72% to £21.3m on revenues of £98.4m, up 16%.
Goldshield has also just proposed the appointment of Kirti Patel to its board as an executive director in August. He has recently acted as a strategic adviser to the company. Kirti Patel is also not related to either Ajit or Rakesh Patel, which would be significant if he found himself in a position of having to recommend a possible bid from either of them.