Pet drug maker quits City’s stock market

A BRITISH pet drug maker will quit the London stock market after agreeing to a £4.5bn takeover by Swedish private equity firm EQT.

Dechra Pharmaceuticals, a FTSE 250 company which makes antibiotics for dogs and anaesthetics for horses, said its board was recommending EQT’s offer.

At £38.75 per share, the bid is 44pc above Dechra’s closing price the day before the approach first emerged.

It is one of the largest leveraged buyouts in Europe this year and marks a fresh blow to London’s market.

The offer is lower than the £4.6bn EQT initially offered in April, and comes after Dechra issued a profit warning during takeover talks.

They have been discussing a reduction after Dechra said it was facing “more volatile and challenging” conditions in the animal health market.

Anthony Santospirito, a partner in the EQT private equity advisory team, said there was “long-term growth” in the animal health market, given more medical innovation taking place and pet ownership increasing.

He said: “We believe that private ownership will enable Dechra’s management team to take a longer-term view as it focuses on accelerating growth.”

The deal, which still needs shareholder and regulatory approval, is expected to result in another company abandoning its London listing, amid wider concerns about the health of the London Stock Exchange.

Building material giant CRH is moving its listing from London to New York. Microchip is also snubbing London for its float.

EQT’s swoop marks one of the most significant private buyouts so far this year, after a slump in deal-making.

Figures out yesterday suggested mergers and acquisitions this year were at the lowest level since 2016, with the value of deals involving UK firms halving to less than $90bn (£72bn) in the first five months of the year.