China's Fosun Pharma set to join bidding for Germany's Stada - sources

Arno Schuetze and Sumeet Chatterjee

(Writes through with context)

FRANKFURT/HONG KONG, March 9 (Reuters) - China's Shanghai

Fosun Pharmaceutical is planning a bid for German

generic drugmaker Stada, already the centre of a 3.6

billion euro ($3.8 billion) takeover battle between two private

equity consortia, two people close to the matter said.

Fosun Pharma is also holding early-stage talks with buyout

funds including CVC about a potential joint bid, but may decide

initially to go it alone with a view to taking financial

investors on board later, one of the people said.

Fosun Pharma said it currently had no information to

disclose. Stada declined to comment.

Stada is expecting to receive so-called confirmatory bids

from a consortium comprising Advent and Permira as well as from

rivals Bain and Cinven, who have teamed up as well, on Friday.

Final bids are due just before Easter, the sources said.

The planned Stada bid is part of Fosun Pharma's overseas

expansion plans, after it acquired an Indian drugmaker, Gland

Pharma, last year. Fosun Pharma's Chairman Chen Qiyu had said in

September that the firm was eyeing investments in other overseas


The company is part of Chinese conglomerate Fosun

International, headed by billionaire Guo Guangchang,

which has been active in global mergers and acquisitions from

property to finance.

For buyout groups it makes sense to partner with a pharma

group, as industry players are usually able to reap cost savings

from an acquisition, giving them an edge in pricing power in a

takeover situation, the sources said.

After looking at Stada's books, the private equity firms may

eventually offer up to 60 euros per share, the sources said,

adding that the confirmatory bids will likely be around the

initial level of about 58 euros per share or 3.6 billion euros

for all of Stada's equity.

Stada had opened its books to potential acquirers after

coming under pressure from its largest shareholder to consider

various takeover approaches.

Cash-rich buyout firms looking to invest in stable

healthcare businesses had been working on offers for Stada for

months, people familiar close to the matter had said.

($1 = 0.9441 euros)

(Additional reporting by Julie Zhu and Alexander Hübner;

Editing by Georgina Prodhan/Keith Weir)