Northern Irish drug maker Warner Chilcott Plc said on Friday it had received a bid approach from a second party, raising the prospect of a 1.5 billion-pound ($2.70 billion) take-over battle.
One day earlier Warner Chilcott - formerly known as Galen Holdings - had opened its books to a buyout consortium, which made an approach worth around 1.5 billion pounds ($2.7 billion) in September.
The company said the new party had entered into a confidentiality agreement and was also beginning due diligence enquiries, but both approaches remained "preliminary in nature". Shares in the firm rose more than 6 percent.
Warner Chilcott has not identified either set of prospective bidders but people familiar with the situation said the initial approach was from a consortium comprising Goldman Sachs's private equity arm, Blackstone Group and Texas Pacific.
Fund managers and analysts said the second potential bidder could be a trade buyer, with some suspicion falling on US firm Barr Laboratories which was linked to the group last year. Nobody at Barr was immediately available to comment.
One person close to the process said the due diligence process would likely continue for several weeks.
"There's quite a lot of work to do," he said, adding that there was no definite timetable in place.
With the books now open, it was also very likely that another party or parties could make an approach, he added. "If anyone has a possible interest they now have every opportunity to step in," the source said.
The private equity consortium made an indicative offer for Warner Chilcott of 800 pence per share in cash last month - but the stock has raced past this level in anticipation of a bidding war.
Shares in Warner Chilcott, which specialises in women's health and urology, were 6.3 percent up on the day at 815 pence by 1440 GMT.
Last year, another take-over offer worth up to 1.5 billion pounds fell through after the bidder - named at the time by industry sources as Barr - pulled out when news of its interest leaked, hitting its shares.
Interest in Warner Chilcott follows a string of deals in the fragmented healthcare sector, which has seen a pick-up in M&A activity recently.
The company's fortunes have ridden a roller-coaster in recent years, with the shares hit by concerns about the safety of hormone replacement therapy (HRT) and the threat of generic competition.
Sales of the firm's drug Sarafem, for pre-menstrual syndrome, have also disappointed analysts since it bought rights to the product in January 2003.
This year, the stock has fallen from a high of 874 pence in March, leading some analysts to view the current approach as an attempt to buy the company on the cheap.
The company - which employs 120 staff in the UK and Ireland, 510 in the United States and 300 in Puerto Rico - recorded 2003 sales of $432 million and made an operating profit before amortisation and exceptional items of $187 million.
It has appointed Hoare Govett and Greenhill & Co as joint advisers in connection with the possible offers.
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