Vectura Group PLC (AIM:VEC) (AIM:VEC) is facing a rare takeover auction whereby Philip Morris International Inc (NYSE:PM). (NYSE:PM) and Carlyle Group have five working days to submit new offers.
The Takeover Panel, which will oversee the procedure, said the deadline will be Tuesday 17 August.
READ: Vectura bidding war continues as Philip Morris comes back with higher offer
If neither bidder announces a revised offer on any of these days, the auction will end.
“In order to provide an orderly framework for the resolution of this competitive situation… the Panel Executive has, after discussions with the parties, established an auction procedure,” the independent body said on Monday night.
The decision comes after a bidding war where Philip Morris and Carlyle, the first company to propose to buy Vectura, put forward two offers each.
On Monday, after Philip Morris came back with a 165p per share proposal, Vectura withdrew its recommendation for the 155p offer from Carlyle ahead of a potential auction.
But a £1bn takeover by the Marlboro cigarette maker concerns several health groups, as the company is vowing to go smoke-free but still makes 75% of its revenue from cigarette sales.
“Every year in the UK, 90,000 people die from conditions such as chronic obstructive pulmonary disease (COPD), which are linked to smoking,” Sarah Woolnough, chief executive of Asthma UK and the British Lung Foundation, told The Guardian.
“It is unacceptable that companies that have profited from the devastation smoking causes could then make even more money providing treatments for the illnesses they have caused.”
Vectura makes asthma inhalers and other treatments for respiratory diseases.
Philip Morris said it is building a portfolio that goes “beyond nicotine” planned to generate at least US$1bn revenues by 2025, having identified respiratory drug delivery as a key focus.
The cigarette maker said that its move into the pharma space is founded on “strong understanding of aerosolisation and respiratory technology” and “its promising product development pipeline”, having invested over US$8bn in nicotine-free products since 2008.
The goal is to become “predominantly smoke-free” by 2025 with more than half of its net revenues from smoke-free products, such as tobacco heater IQOS.