Croatia's Pliva says Actavis offer fair, awaits Barr

Croatia's Pliva says Actavis offer fair, awaits Barr

U.S. group Barr is expected to announce later on Friday whether it will trump Actavis's 795 kuna a share offer, which topped its own bid of 743 kuna a share.

The battle for Pliva, eastern Europe's biggest pharmaceutical company by sales, has seen its shares double since the start of the year, but some investors think it has further to run.

Today, Pliva's shares were up 0.5 percent at 840 kuna, almost 6 percent above the Actavis offer.

"I wouldn't be surprised if Barr came back with a slightly higher offer," said Raiffeisenbank analyst Bernd Maurer.

He said the Actavis offer was pitched at about 2.2 times Pliva's forecast sales for 2006, in line with recent deals in the sector, but that Pliva justified a premium.

Whichever company buys Pliva will become the third-biggest generic drug producer in the world, behind Israel's Teva Pharmaceutical Industries Ltd

Actavis launched the battle for Pliva in March and controls about 21 percent of its shares outright or through options

But Pliva has made no secret that it would prefer a deal with Barr, according to analysts.

Pliva said on Friday that, following independent advice from Deutsche Bank, it considered the Actavis bid to represent "fair value,"

However, it added in a statement: "The Supervisory Board believes it is important to note that Actavis is present in markets where Pliva is also present and where overlap in business operations may exist."

Raiffeisenbank's Maurer said Pliva believed it would have a higher profile as the European arm of Barr than within Actavis.

"Pliva can be more Pliva with Barr than with Actavis," he said.

Actavis has promised to make Pliva's Zagreb headquarters a central part of the combined business, to transfer production to Craotia from existing Actavis sites and to seek a stock listing in Zagreb.

Pliva posted a first-half net profit of $62.9 million on Thursday, in line with analysts' forecasts, and stuck to its financial outlook despite slower sales growth.