Goldshield bidding war

A bidding war broke out in September 2009 over Goldshield Group, the UK-based pharmaceutical and consumer health company. The battle is being fought out by two investment vehicles, AIT Investments and Midas Bidco.

Goldshield began life in 1991, gained its first marketing authorisation for a product it had developed itself in 1996, and floated on the London Stock Exchange in 1998. The Group was founded by two brothers, Ajit and Kirti Patel, along with a third partner, Shane Gogerly. In recent years, Goldshield was one of a number of companies to face investigations over alleged price fixing by both the Serious Fraud Office and the NHS. Although the cases ultimately collapsed, the investigations did see both Ajit Patel and Kirti Patel step down from the firm's Board in order to fight allegations levelled at them; Kirti Patel now occupies the position of Group Executive Director in the company. Perhaps ironically, given the legal battles the firm has faced, Goldshield's current Non Executive Chairman is Dr Keith Hellawell, who in previous years was a Chief Constable for two British police forces and in the late 90s was responsible for the UK's anti-drugs policy. For its most recent fiscal year, ended March 2009, Goldshield reported revenues worth £98.4 million (US$156.9 million), with profit after tax of £13.9 million (US$22.1 million). This was a significant improvement on the revenues of £84.9 million and profit after tax of £6.3 million reported for the previous fiscal year.

Ajit Patel is now involved in one of the parties bidding to acquire Goldshield, AIT Investments, which was the first to announce an offer. AIT describes itself as a newly-incorporated company formed by the Fuhrer family for the purpose of implementing the acquisition of Goldshield. The Fuhrers are an Israeli family which own and control the Neopharm group of companies, which market ethical pharmaceuticals and branded consumer healthcare products.

The other bidder for Goldshield is Midas Bidco, an investment vehicle set up by Goldshield's management team; involved in this bid is Goldshield co-founder, Kirti Patel; the two brothers are thus facing off over control of the company they set up and then had to withdraw from in order to fight the price fixing allegations.

AIT commenced bidding for Goldshield with an offer of 440 pence per share, valuing the company at some £162.1 million (US$257.1 million). In response, Midas announced it had put financial backing in place to allow it to make an offer above 440 pence per share. AIT hit back, raising its offer to 450 pence per share, valuing the company at £165.7 million (US$262.8 million). Bidco then upped its offer to 460 pence per share, making the firm worth £169 million (US$268.0 million). In the latest turn, AIT then increased its bid on 2nd October to 480 pence per share, which would value Goldshield at £176.8 million (US$280.4 million). At the time of writing, this is where the bidding rests. However, there is no doubt that the deal, which has pitched two brothers against each other, is not yet done.

Ian Platts - Editor, World Generic Markets