CVC, Shanghai Pharma mull joint bid for Stada

London - CVC Capital Partners and Chinese drugmaker Shanghai Pharmaceuticals Holding Co are in talks to team up on a bid for Stada Arzneimittel AG, according to sources, as a bidding war for the German company heats up.

The companies will make a decision about a joint bid as soon as next week, the source, asking not to be identified as the deliberations are private.

There is no final decision yet on whether the firms will team up or make an offer, and CVC has also spoken to other Asian drugmakers, they said. Binding offers may be due this month, the source said.

Stada let a deadline for an offer from Advent for 3.61 billion euros ($3.81 billion) pass last month to keep the process open for other bidders. Private equity firms, sitting on record amounts of undeployed capital, are flocking to assets like Stada amid a shortage of deals.

CVC and Shanghai Pharma would be competing against other investor groups including Advent International Corp, which may team up with Permira, and Bain Capital, which is in talks to join with Cinven Ltd, the people said. Singapore's GIC Pte is also interested in making an offer as a co-investor with Advent, sources said previously.

Shares of Stada have risen by roughly 80 percent in the past year, giving it a market value of 3.5 billion euros. Representatives for Stada, CVC, Advent, Permira, Cinven and Bain declined to comment. A spokeswoman for Shanghai Pharma had no immediate comment.

A tie-up with a drug company could help CVC extract greater cost savings from the purchase. CVC invested in another generic and biosimilar pharmaceutical firm called Alvogen in 2015.

Advent's other portfolio assets would give the private equity firm the greatest synergies out of the bidders, analysts at Bankhaus Lampe said in a note.

BLOOMBERG