German group raises drugs bid

BY MAGNUS GRIMOND

The German group GEHE has lifted the stakes in its battle to win control of the pharmaceuticals wholesaler AAH, raising its offer by 6 per cent to £400m yesterday. GEHE said the new terms were final.

GEHE quickly followed up news of the higher offer with a swoop on its target's shares, with the brokers Cazenove scooping up 13.8 per cent by close of play yesterday. GEHE now owns or has acceptances for 17.78 per cent of AAH's equity.

The new offer was rejected by AAH, but although the shares put on 7p to 442p yesterday, they remained stubbornly below the new offer price of 445p, suggesting that the market believed that the latest move may deliver the company to its predator.

Analysts were generally of the opinion that any chance of the British company finding a white knight at this late stage in the bid process was remote, while GEHE had now offered just enough to tip shareholders in its favour.

Dieter Kammerer, chairman of GEHE's management board, said the new offer was worth 20.7 times AAH's estimated earnings of 21.5p for the year to March.

Claiming the latest deal was "more than generous", Dr Kammerer said: "It takes full account of the rationalisation that has taken place and the magnitude of the task involved in trying to improve AAH's performance."

John Padovan, Dr Kammerer's opposite number at AAH, called on shareholders to reject the higher terms, "which the board continues to regard as . . .an opportunistic attempt to acquire the company on the cheap".

On Tuesday, AAH sent shareholders its latest and last defence document, claiming that cost savings could hit £14m by the 1996-97 financial year.