Private equity firms Nordic Capital and Permira have intensified their pursuit of Danish vaccine maker Bavarian Nordic A/S by lowering the acceptance threshold for their takeover bid to two-thirds of shares, down from the previous 75% requirement. This marks the second reduction in the minimum acceptance level as the consortium faces mounting shareholder opposition to their acquisition attempt.
The bidders announced they would complete the acquisition if they succeed in purchasing at least two-thirds of shares in the Danish vaccine maker, representing a strategic shift to overcome investor resistance. This threshold reduction comes less than a week after the consortium raised their offer price to 250 kroner ($38.86) per share, up from their original bid of 233 kroner announced on July 28.
Escalating Takeover Battle
The private equity pair initially extended their offer deadline to October 14, providing additional time to obtain final regulatory approval while maintaining their original price tag of 233 kroner per share. However, facing significant pushback from key investors opposed to the valuation, the consortium was forced to sweeten their offer.
The ongoing clash with shareholders has deepened as many investors have refused to sell their stakes, viewing the initial valuation as inadequate for the Danish biotechnology company. The bidders' decision to lower the acceptance threshold twice demonstrates their determination to bypass shareholder opposition and secure the deal despite the resistance.
Strategic Maneuvering
The consortium's approach reflects the challenges facing private equity firms when attempting to acquire publicly traded biotechnology companies with strong shareholder bases. By reducing the minimum acceptance level from 75% to two-thirds, Nordic Capital and Permira are positioning themselves to complete the transaction with a lower level of shareholder support.
The extended offer period until October 14 was initially designed to provide sufficient time for regulatory clearance, but the subsequent price increase and threshold reduction suggest the bidders are adapting their strategy in real-time to address investor concerns and market dynamics.
The takeover battle for Bavarian Nordic highlights the complex dynamics between private equity acquirers and public company shareholders in the biotechnology sector, where valuations often become contentious points of negotiation. The outcome of this bid will likely influence future private equity approaches to acquiring established vaccine and biotechnology companies.
