UDG Healthcare accepts higher £2.8bn takeover bid

The board of private healthcare business UDG has accepted an increased takeover bid valuing the company at £2.8 billion after some shareholders claimed an earlier bid was “opportunistic”.

US private equity firm Clayton, Dubilier & Rice said the 1,080p-a-share bid is its final offer and now has the support of large investors.

Shareholders Allianz and Kabouter, making up 11.41% of total investors, have written letters of support in favour of the offer.

The company added that other institutional investors have also indicated their willingness to vote for the deal.

The latest price is higher than the 1,023p-a-share offer made last month.

Allianz had called the original offer “opportunistic” and said it “significantly undervalues UDG and its prospects”.

UDG directors said they believe the company is “well-positioned for future continued success and that the long-term prospects of the group are strong as an independent listed entity.

“Nevertheless, the UDG directors recognise that uncertainties exist, many of which are beyond UDG’s control.”

A vote on the deal will take place next month at the company’s head office in Dublin unless an outside bid is received, in which case Clayton, Dubilier & Rice may increase its offer.

UDG operates two divisions and employs around 9,000 workers across 29 countries.

Its largest division, Ashfield, is a global healthcare services business working in advisory, marketing and communications.

The other division, Sharp, is a contract packaging, clinical, manufacturing and technology services business.

The group was built by Liam FitzGerald, who was chief executive for 16 years until 2016.

He is now an adviser in Europe to Clayton, Dubilier & Rice and last year became chairman of healthcare marketing and services company Huntsworth, after the private equity firm bought it for £575 million last May.

The new owners plan to merge Huntsworth with Ashfield.

Clayton, Dubilier & Rice recently hit the headlines for making a £5.5 billion bid for supermarket Morrisons, although the company said it significantly undervalues the business.