Alliance Pharma has agreed to a £350million takeover by its biggest shareholder, asset management group DBAY Advisors. The drug manufacturer said its investors would receive 62.5p per share under the deal, a 40.9 per cent premium to its closing share price on Thursday.
The proposal is also more than double the 29.4p closing price recorded in May 2024 when Alliance announced the departure of its chief executive and a third delay to the publication of its 2023 results in five weeks. Alliance's new boss, Nick Sedgwick, has since been conducting a review to update the company's strategy and formulate a plan to boost its long-term organic growth.
Directors at the business said the new plan had multiple uncertainties and would take 'significant time and investment' to achieve its potential benefits. They also said DBAY's support and private capital will enable Alliance to return to its acquisition strategy 'more quickly than if it remained on the public market'.
Goods: Alliance Pharma specialises in making products for consumer healthcare categories with few major competitors, like eczema, scar care and eye health. Alliance has traditionally expanded through takeovers funded by equity placings but has not completed any such deals over the past two years.
The AIM-listed group blames this on high debts, operational challenges, a 'restrictive funding environment', and its declining share price. DBAY believes the cost of Alliance's public listing hurts its ability to prioritise long-term growth and did not provide 'significant benefits' for the company given its current liquidity levels.
