Yahoo Finance Marlboro maker tightens grip on Vectura ahead of £1bn takeover
More than a fifth of Vectura investors have already sold out their shares to Philip Morris International, the maker of Malboro cigarettes, ahead of its planned £1bn takeover of the asthma company.
Philip Morris, which is the world's largest listed tobacco company, now owns 22.6pc of Vectura after buying shares from existing investors on the open market.
The move allows shareholders to receive the 165p a share it is offering before the tender offer closes.
Philip Morris posted the takeover offer to shareholders earlier this week. It needs more than 50pc of investors to agree to the deal in order for it to go ahead. Shareholders have until September 15 to decide whether to accept it and sell their shares to the cigarette producer.
It comes despite mounting pressure from health charities which have been urging shareholders to block the deal. Vectura's technology is used in NHS inhalers to help treat asthma and smoking-related conditions.
A group of health charities, experts and doctors from the UK, US, Europe and Australia, warned shareholders in an open letter this week that a takeover by Big Tobacco would “significantly hamper Vectura’s ability to continue operating as a viable, research-oriented business”.
Charities including Asthma UK & the British Lung Foundation and the COPD Foundation, said there was a risk that collaborations with research institutions and universities may be broken off if the deal is completed, due to ethical policies over working with tobacco companies.
They said a takeover could also bring an end to government grants from more than 180 countries, as they have signed a treaty agreeing to reduce the tobacco industry influence in public health policymaking.
They urged investors to prove their commitment to ethical investing by rejecting the deal.
The letter said: "Given tobacco negatively impacts 14 of the 17 [United Nations' sustainable development goals], the approval of PMI’s proposed takeover would be inconsistent with these core values, in our view."
The comments will stoke concerns among major institutional investors that the takeover will be seen as a test of their ethical credentials, with shareholders including Legal & General speaking out frequently on the importance of Environmental, Social, and Governance (ESG) investing.
Shareholders have so far remained silent on the takeover bid.
Last week Vectura's board backed Philip Morris' proposal over a lower offer tabled by private equity firm Carlyle. The charities had previously written to Vectura's directors asking them to oppose the deal.
The board said Philip Morris offered more cash for shareholders than Carlyle's proposal, and that the tobacco firm's significant financial resources could benefit Vectura.
Philip Morris has also brushed off criticism over the takeover, instead saying it would allow it to diversify into a "wellness company". The tobacco company has called for a ban on cigarettes in as little as 10 years.
