U.S. pharmaceuticals company Abbott Laboratories Inc made an unsolicited offer for the drugs unit of Belgian chemicals firm Solvay, a source familiar with the situation said on Thursday, rivaling a bid from private equity-owned drugs maker Nycomed.
The potential deal could be Abbott's biggest acquisition.
Solvay, which said in April it was reviewing options including a sale of its drugs unit, could be looking for up to 5.4 billion euros for the business, but a deal closer to 5 billion euros will not disappoint investors, analysts said.
The source told Reuters Abbott had made an offer for the unit but did not disclose the offer price.
The Wall Street Journal earlier reported Abbott made an offer and was a strong candidate to secure a deal valued at between 4 and 5 billion euros ($5.9-$7.4 billion).
Sources previously told Reuters that Swiss drugmaker Nycomed had made a fully-financed, 4 billion to 4.5 billion euro offer. Nycomed has repeatedly declined comment.
This offer was seen as very low, Bank Degroof analyst Bernard Hanssens said. There is now a potential for higher proceeds from this disposal.
Abbott co-markets with development partner Solvay the cholesterol treatments TriLipix and Tricor. It is also working in the United States on a combination cholesterol treatment with AstraZeneca using TriLipix as Solvay pursues the development of a combination treatment for Europe and elsewhere.
Any deal between Solvay and Abbott, however, would need to resolve U.S. litigation against them regarding application of competition rules linked to the formulation of treatments.
Shares in Solvay, which have risen about 45 percent since it announced a review of its strategy in April, closed 2.4 percent higher at 75.9 euros. Abbott shares were up 0.3 percent.
The WSJ also reported that Belgian pharmaceutical company UCB is also considering a bid for the Solvay unit, but a UCB spokeswoman declined to comment and analysts were left divided on the possibility of such a bid.
Solvay declined to comment on the WSJ report, and an Abbott spokesman also declined to comment. Under Belgian law, Solvay would not necessarily have to issue a statement about the future of its pharma unit until it took a decision.
BIGGEST DEAL EVER?
Abbott has had an appetite for acquisitions this month, buying medical device company Evalve Inc for $410 million and eye treatment firm Visiogen Inc for $400 million.
The firm's interest in Solvay's drug unit comes after market talk it had dropped out of the initial running and the 5 billion euro price tag could be Abbott's biggest acquisition ever, eclipsing its $6.9 billion acquisition of Knoll in 2000.
That deal saw it acquire the rheumatoid arthritis treatment Humira -- Abbott's biggest selling drug.
Abbott Chief Executive Miles White said in January the company's acquisition priorities were on non-pharma. But I'm not going to pass up an attractive pharma opportunity, he said.
But in June, White said he maintained a bias toward building the non-pharmaceutical side of the company's business and was not interested in a mega deal or a merger of equals.
With 2.7 billion euros in 2008 sales, Solvay's drugs unit is considered under resourced compared with rivals and analysts have questioned whether synergies exist between its chemicals and drugs unit now that new drugs are biological or biotech drugs.
A divestment of the unit would continue a trend seen in recent years for drugs-chemicals hybrids to sell their drugs units, with German hybrid peer Bayer also subject to speculation that it could soon launch a strategic revamp.
A Nycomed-Solvay pharma combination would have in excess of 6 billion euros in annual sales, giving it bigger scale and drugs to treat heart, gastrointestinal and central nervous diseases.
(Additional reporting by Philip Blenkinsop in Brussels, Lewis Krauskopf in New York and Jessica Hall in Philadelphia and Debra Sherman in Chicago. Editing by Hans Peters and David Cowell)