BTG to buy Protherics in $390 mln UK biotech deal

BTG has agreed to buy Protherics for around 218.1 mln pounds ($388.6 mln) in an all-share deal, the companies said on Thursday, marking the further consolidation of Britain's biotech sector.

Biotechnology has seen a spate of takeover activity recently, spurred by large drugmakers seeking to acquire new products to fill their depleted drug development pipelines and smaller companies joining forces to stretch cash reserves.

Protherics shareholders will receive 0.291 new BTG shares for every one Protherics share held. That values Protherics at 60 pence a share — a premium of 45.5% to the closing price on Sept. 17 — based on a BTG share price of 206p.

Annualised merger cost synergies and rationalisation of the enlarged group's cost base are expected to be around 20 mln pounds by 2010/11, the two companies said.

The acquisition is forecast to be earnings enhancing, on an EBITDA basis, and cash neutral from 2009/10 and significantly earnings enhancing thereafter.

Protherics first announced last month that it had received several bid approaches and there had been some speculation it might be bought by AstraZeneca Plc.

"I think people would have preferred a cash offer from Big Pharma rather than paper in a company whose shares have gone up 115% in the last year when everything else has gone down," said KBC analyst Paul Cuddon.

AstraZeneca has a deal dating back to 2005 with Protherics covering its experimental drug CytoFab for sepsis, a deadly syndrome linked to serious bloodstream infections. The Anglo-Swedish group also has a 3.2% stake in the company.

Protherics also has an alliance with privately owned Swiss drugmaker Nycomed, which sells its CroFab treatment for rattlesnake bites and DigiFab for drug overdoses in the United States.

Rothschild is acting as financial adviser to BTG. Jefferies is acting as financial adviser to Protherics.