Shares of Cheshire-based international veterinary drugs giant Dechra Pharmaceuticals rose about 35% to around £37.50 on Friday after it said late on Thursday it has entered into discussions with Swedish private equity firm EQT over a possible £4.63 billion cash takeover offer for Dechra.
The Abu Dhabi Investment Authority would be a co-investor with EQT.
Under the possible offer, Dechra shareholders would receive £40.70 per share in cash at that price, a roughly 47% premium to Dechra’s closing price on Thursday.
Northwich-based Dechra said it has informed EQT that it will recommend the possible offer if EQT announces a firm intention to make an offer.
EQT has until May 11 to announce a firm intention to make an offer.
Victoria Scholar, Head of Investment, Interactive Investor, said: “Dechra fared extremely well during the pet boom during the pandemic as a strong stay-at-home stock.
“However it has struggled since, issuing a profit warning in February, citing unpredictable trading conditions.
“Although shares in Dechra are soaring today on the M&A speculation, the stock is not fully pricing in the all-cash off suggesting there is still some uncertainty about whether the deal will cross the line.
“Before today’s surge, shares had fallen sharply over the last year from 3,822p in April 2022 to 2800p by Thursday’s close.”