Phoenix gets bids for Tamro and Comifar

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Phoenix Pharmahandel, the Merckle family-owned drug distributor, has moved closer to a break-up sale after receiving unsolicited bids for key subsidiaries Tamro and Comifar Distribuzione, two sources familiar with the situation told mergermarket.

Phoenix and Merckle family holding company VEM declined to comment, but both sources, who are independently following the situation, said Phoenix’s trustee Hartwald Wiedmann had received approaches for Tamro and Comifar, which operate in Scandinavia and Italy respectively.

The first source said Tamro, which operates in Finland, Sweden, Estonia, Latvia and Lithuania, could be worth EUR 2bn, based on 2008/2009 net sales of EUR 5.5bn The second source said Phoenix had also been approached about Comifar, adding that VEM could be considering a break up sale, including Tamro and Comifar, if it fails to raise enough money in the planned sale of other pharma unit, generics maker Ratiopharm. According to industry bankers, Ratiopharm, which just mandated RBS and Commerzbank, could fetch as much as EUR 3bn.

A Nordic banker said it would not make sense to split Tamro out of Phoenix, as Tamro is one of Phoenix’s most profitable units. He suggested a sale of the entire business with Boots-owner KKR, widely tipped as an interested party, would be the most likely option.

But the first source disagreed, saying that low valuations and the “defensive” nature of Phoenix’s business made a stock market flotation more viable.

Regardless of the strategy used, the second source said any sale auction is unlikely to begin until the autumn, once VEM obtains more clarity about the proceeds it can extract from Ratiopharm’s divestiture.

“This [Ratiopharm] will be a difficult sale as there aren’t too many suitors interested in the business,” the second source said.

Adding spice to an already heady cocktail, he said the Merckle family and a 20-bank consortium with which it is rushing to refinance its business, are holding bitter arguments about how the businesses should be sold.

“At the heart of the transaction is the family and the banks. They both have different agendas and the trustees are sitting between them, trying to broker a deal,” the source noted. “The family wants to keep as much of the business as they can while the banks want their money so these priorities will affect the sale.”

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