April 30, 2009 / 3:16 PM / 11 years ago

"Books" due out soon for Solvay drug unit -source

* Information memos on drugs business out in days -source

* Solvay stresses other options still open

LONDON, April 30 (Reuters) - Belgium’s Solvay (SOLB.BR) will send out information memorandums about its pharmaceutical business to potential buyers of the unit in the coming days, a source familiar with the matter said.

Analysts reckon the unit could fetch 5 billion euros ($6.66 billion) or more — roughly the entire current market capitalisation of Solvay.

Last week Solvay wrote to employees, saying it was “happy to be a hybrid company”, combining drugs, chemicals and plastics, but it needed to adapt. The company said it was considering selling, floating, or expanding the pharmaceuticals unit through acquisitions, or finding an outside partner. So-called “books”, or information memorandums, are marketing documents designed to whet bidders’ appetites for an asset.

Indicative bids are likely to be due in early to-mid June, the source said, although a date is not yet fixed. A second round of bids should follow after more detailed due diligence.

Earlier this month two sources familiar with the matter said Solvay planned to start a formal two-stage auction of the business soon after Easter and had hired Citigroup, Morgan Stanley and Rothschild as advisers.

The unit made sales of 2.7 billion euros in 2008, out of a group total of 9.6 billion, and helped shield the company from the worst of the economic downturn.

However Exane BNP Paribas says a unit sale could fund capital expenditure or acquisitions in the other businesses, as well as a return of cash to shareholders.

Sanofi-Aventis (SASY.PA), Novartis NOVN.AX, Bayer BAYG.DE, AstraZeneca (AZN.L), Japan’s Takeda (4502.T), and Abbott (ABT.N) — which already has a partnership with Solvay — have been mooted as would-be buyers.

Solvay declined to comment.

Reporting by Quentin Webb in London and Aaron Gray-Block in Amsterdam; Editing by David Cowell

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