Talks are underway regarding a possible cash offer for pet drugs firm Dechra Pharmaceuticals

In a statement, Dechra said: “The board of Dechra and EQT X EUR SCSp and EQT X USD SCSp, collectively referred to as EQT, note the recent press speculation and confirm that they have entered into discussions with respect to a possible all-cash recommended offer for the entire issued, and to be issued, ordinary share capital of Dechra by EQT.

“In the event that a firm offer is made, it is currently being discussed that the Private Equities investment department of the Abu Dhabi Investment Authority, through a wholly-owned subsidiary of ADIA, would be a co-investor with EQT.

“Having considered the possible offer, together with its financial adviser, Investec, the board of Dechra has confirmed to EQT that it is prepared, subject to the finalisation of all relevant terms in a manner satisfactory to it, to provide a recommendation at the possible offer price indicated should EQT announce a firm intention to make an offer pursuant to rule 2.7 of the code on such terms. There can be no certainty that any firm offer will be made for Dechra. A further announcement will be made as appropriate.”

Analysts from Panmure Gordon said: “The after-hours confirmation of talks regarding a possible cash offer for Dechra at 4,070p by EQT is a strong reminder of the unrecognised value within the animal health sector. The offer price is a significant premium to the prior closing price of 2,690p while still falling short of historic highs: Dechra’s pipeline now demands greater investment, of course, since the acquisitions of Med-Pharmex and Piedmont last year, the latter being a pure development play.”