PPD shares ‘limited’ confidential info with new potential buyer

By Gareth Macdonald

- Last updated on GMT

Under offer CRO PPD has signed a confidentiality agreement with another potential buyer according to an SEC filing submitted last week.

The agreement – covered on page 29 of this filing ​ – is with one of 22 parties contacted by PPD's advisor Morgan Stanley during the 'go shop' period that began shortly after the $3.9bn (€2.8bn) takeover bid by the Carlyle Group and Hellman & Friedman was announced.

PPD describes the new agreement as ‘substantially similar’ to those it has with Carlyle and Hellman & Friedman and adds that it has provided the unnamed party with ‘limited’ confidential information.

However, PPD also says that, as of Thursday last week, it had not received any competing takeover offers. The firm declined to comment further when contacted by Outsourcing-pharma.com.

Few clues as to the identity of the group involved are provided in the filing. However, the document does reveal that, of the organisations approached by Morgan Stanley so far, nine are ‘strategic’ and 13 are ‘financial.’

PPD also says that: “The contacted parties include competitors of the Company that expressed interest in participating in the sale process earlier but were not invited to do so at that time.”

Muted reaction

PPD’s agreement met with muted reaction. Monringstar analyst Lauren Migliore told Outsourcing-pharma.com that: "By entering into a confidentiality agreement with another player, PPD is making itself available to other potential buyers that could potentially offer a higher price.

"We originally pegged the fair value of the company at $35 per share on a stand-alone basis prior to the deal announcement. Carlyle's $33.25 per share offer was close to our valuation of the firm. However, the company might be looking to see if it can net an even richer pricing premium before its final decision to sell itself​."

Another observer, Tim Evans at Wells Fargo Securities, set the development in the context of recent shifts in the international credit markets.

He said in a note that: “The likelihood of a higher bid is low, but probably not as low as when the deal was originally announced given some improvement in the credit markets over the past two weeks​."

The 'go shop' period during which Morgan Stanley can approach potential rivals to Carlyle Group and Hellman & Friedman ends on November 1.

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