Management concern over shareholder value and the end of an asset displacement policy will move French company Rhone-Poulenc to finally decide to split into a chemicals company and a pharmaceutical company, according to Jean Borjeix, chief analyst at Jean-Pierre Pinatton, who feels such as move would boost share value by a third.
At the end of May, company managing director Igor Landau said that while the firm had been looking at a demerger of the pharmaceutical division, it has, for the time being, decided aginst such a move.
The company is worth no more than 40-45 billion French francs ($7.8-$8.9 billion), Mr Borjeix feels, because of the weight of underperforming chemical activities and their important debts. If a demerger is effected, total group value could be 60 billion francs. "An asset gain of such a size would allow (an investor) to wait until the (demerger) operation takes place," he said, noting that the 1998 and 1997 results forecasts limited the downside.
This article is accessible to registered users, to continue reading please register for free. A free trial will give you access to exclusive features, interviews, round-ups and commentary from the sharpest minds in the pharmaceutical and biotechnology space for a week. If you are already a registered user please login. If your trial has come to an end, you can subscribe here.
Login to your accountTry before you buy
7 day trial access
Become a subscriber
Or £77 per month
The Pharma Letter is an extremely useful and valuable Life Sciences service that brings together a daily update on performance people and products. It’s part of the key information for keeping me informed
Chairman, Sanofi Aventis UK
Copyright © The Pharma Letter 2024 | Headless Content Management with Blaze