* Deal stumbles on control, price - sources
* Carlyle, Avista could re-enter talks if terms
* Forest, Watson also help talks over Rottapharm
By Sophie Sassard and Simon Meads
March 15 Generics drug maker Mylan
has pulled out of talks to buy a stake in Italian
pharmaceuticals firm Rottapharm, two people familiar with the
situation said, posing another setback to the arduous sales
process that has been dragging on since the middle of last year.
The Rovati family had been looking to find an investor among
rival pharma groups such as Mylan, Forest Laboratories
and Watson Pharmaceuticals, after it failed to sell a
minority stake to private equity houses.
But the sources said the selling family has not been able to
agree to give up control of the company and was not prepared to
compromise enough on price either.
As a result Mylan, based in Canonsburg, Pennsylvania, and
the world's third largest generic drugs maker, is no longer in
talks with Rottapharm's owner, two of the people said.
"If you want to keep control you need to compromise on
price," one said. "If you want a high price, you need to give
away some control."
Rottapharm founder Luigi Rovati put a stake of up to 50
percent in the group on the market last year, looking for a deal
that would value the business at 2 billion euros ($2.6 billion).
Rovati first looked to sell part of the equity to Italian
fund Clessidra in order to keep control of the company in
Italian hands, and sell about 40 percent to an international
buyouts group, the people said.
But it could not agree on those conditions with private
equity firms including Carlyle Group and Avista
and the talks stalled at the end of January.
The company has since had talks with other U.S. generic and
branded drugs groups Watson Pharmaceuticals and Forest
Laboratories, several people close to the process said.
One of the sources, who is familiar with Watson, said the
group was unlikely to buy Rottapharm because their existing
European presence means they would extra only few synergies.
And Forest -- which makes the antidepressant Lexapro -- is
having problems of its own. It is expected to see its revenue
drop by about one-fourth, after its flagship drug loses patent
protection early next year.
The company is also under pressure from billionaire activist
investor Carl Icahn who built a holding of over 9 percent in the
company in an attempt to change its boss and bring in new board
Established in 1961, Rottapharm makes treatments for
conditions including osteoarthritis as well as personal care
products such as baby wipes.
Rottapharm, Mylan, Watson, and Forest either declined to
comment or officials were not immediately available for comment.