GSK considers cut-price bid for Serono

GlaxoSmithKline, the UK-based pharmaceuticals group, is again considering a possible bid for Serono, the Swiss biotechnology business, after an auction earlier this month failed to find a buyer for the company at the $15bn asking price.

GSK is considering offering a lower price for the company, as Goldman Sachs, which is advising Serono, attempts to find fresh purchasers for the 62 per cent stake held by the family of Ernesto Bertarelli, chief executive, as a precursor to a public offer for the outstanding shares, people close to the discussions said.

A takeover would mark fresh consolidation in the pharmaceutical sector and the end of independence for Europe’s largest biotechnology group.

The failure of the first round of bidding was a setback for Serono and Goldman, which was appointed late last year for what the Swiss company called an examination of “strategic alternatives”.

It reflected a widely-held belief among analysts that Serono was a relatively mature company with growing competition for existing products and a disappointing pipeline of drugs in development.

However, at a lower price a number of pharmaceutical companies could still be interested in Serono’s operations, including Rebif, its top-selling multiple sclerosis drug.

People close to the discussions insisted that negotiations to find a purchaser remained “ongoing”, although one indicated that the procedures for a new round of bidding remained unclear.

Novartis of Switzerland was widely seen as a likely bidder, but executives have repeatedly played down the likelihood of a deal. Johnson & Johnson of the US has also been tipped as a potential purchaser, as has Pfizer, the world’s largest pharmaceuticals group.

GSK, which declined comment on Sunday, may have a portfolio which offers relatively little overlap with Serono’s, and could potentially sell off parts of the company.

Serono shares closed at SFr973 on Friday, giving the group a market value of SFr14.8bn. The shares hit a 52-week high of SFr1,105 last November but have fallen back in recent weeks as takeover hopes appeared to recede.

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