* Deal could be worth more than $5 billion-sources
* Second-round bids due in second half of April-sources
* GSK drops out of running-sources
By Jessica Toonkel and Ben Hirschler
NEW YORK/LONDON, April 2 At least three of the
world's top drugmakers are bidding for Brazil's Ache
Laboratorios Farmaceuticos in an auction that may value the
group at more than $5 billion, people familiar with the matter
Pfizer Inc, Novartis AG and Abbott
Laboratories are all weighing second-round bids to
acquire the company, which boasts a strong position in Brazil's
fast-growing pharmaceuticals market, the people said.
Bids are due in the second half of April, two of the people
said, asking not to be identified because the auction is not
Privately owned Ache is attractive to drug companies looking
to increase their footprint in the growing market of Latin
America. But one of the families that own the company has said
it would like to hold on to its stake, and uncertainty has
deterred some potential bidders.
GlaxoSmithKline showed early interest but has
dropped out of the running, the people said.
Officials for the multinational companies all declined to
People close to the process told Reuters in February that
families with large share holdings in Ache had asked investment
bank Lazard Ltd to explore a sale, although whether a
deal will go ahead remained uncertain given divisions among the
families controlling the company.
The Baptista and Siaulys families, who hired Lazard, are
ready to sell up but the Depieri family would like to hold on to
its stake, sources said.
"People are a bit worried about the situation surrounding
the families selling it and are wondering if they are ever going
to be satisfied with the price. Some people who were interested
have pulled out for that reason," one source said.
Lazard has declined to comment on the bank's role in the
process and an Ache spokesman reiterated the position that the
company is not for sale.
Ache ranks fourth in terms of overall Brazilian drug sales
but is the leader in prescription medicines and is also active
in the rapidly expanding over-the-counter (OTC) business.
Ache's earnings before interest, tax, depreciation and
amortization (EBITDA) for the current year are expected to be
around $300 million and the company's owners are seeking a lofty
"high-teens" multiple of EBITDA in any sale, people familiar
with the matter have said.
A multiple of 15 to 20 times would suggest a price tag of
$4.5 billion to $6 billion.