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Alliance Pharma's Takeover Drama: What the Form 8.5 Filing Reveals

Marcus LeeTuesday, Apr 22, 2025 3:35 am ET

3min read

The recent Form 8.5 filing for Alliance Pharma plc (LSE: APH) has sparked renewed interest in its ongoing takeover saga. The document, filed by Investec Bank plc as an exempt principal trader (EPT), details the sale of 17,274 ordinary shares at £64.30 on April 14, 2025—a price near the upper end of the stock’s 12-month trading range. This activity, while seemingly routine, offers clues about shifting dynamics in the battle for control of the pharmaceutical firm.

The Takeover Context: Aegros Bidco’s Play for Control

The Form 8.5 filing is tied to Aegros Bidco Limited’s proposed acquisition of Alliance Pharma, which seeks to acquire 100% of the company’s issued share capital (excluding shares held by DBAY Advisors’ affiliated funds). The bid, first announced in January 2025, offers shareholders a choice between cash at 62.5 pence per share or a riskier “rollover” deal involving non-voting equity in a new holding company. The Investec filing, acting on behalf of clients, underscores the active trading environment ahead of the scheme’s finalization.

Key Takeaways from the Form 8.5:

Institutional Activity Surge:
The filing comes amid a wave of Form 8.3 disclosures from institutions like Barclays, Evelyn Partners, and Syquant Capital between March 31 and April 4, 2025. These filings signal significant stake adjustments by investors positioning ahead of the takeover, possibly capitalizing on the 112.9% premium the bid offers over Alliance’s May 2024 share price.
No Hidden Agreements:
The Form 8.5 explicitly states no indemnity arrangements, derivatives, or voting rights tied to the transaction. This transparency aligns with Takeover Code requirements, suggesting the sales were part of market-making or hedging activities, not a covert play for control.
Regulatory Compliance:
The filing underscores adherence to the Takeover Code’s disclosure rules, ensuring transparency in dealings that could influence the bid’s outcome.

The Risks and Opportunities Ahead

While the bid’s terms are favorable for cash-seeking shareholders, the negative P/E ratio (-10.47) highlights Alliance’s recent financial struggles, potentially raising questions about the bid’s valuation. Investors opting for the rollover face uncertainty, as the non-voting shares lack liquidity and exposure to future earnings.

Meanwhile, the 70.1% stake for DBAY Affiliates post-acquisition raises governance concerns, though the scheme’s approval by shareholders on March 13, 2025, suggests broad support. The final hurdle—a court sanction—looms, but the bid’s procedural progress bodes well for closure by mid-2025.

Conclusion: A Cautionary Play for Risk-Tolerant Investors

The Form 8.5 filing underscores the institutional confidence in the takeover’s success, given the premium on offer and the absence of hidden risks. However, Alliance’s negative P/E and reliance on the bid’s execution temper optimism. For shareholders, the decision hinges on whether they prioritize immediate cash liquidity (despite Alliance’s valuation challenges) or a speculative bet on long-term recovery via rollover shares.

Investors should monitor the final court sanction date and the uptake of the rollover option, which could influence Alliance’s post-acquisition stability. While the bid’s structure complies with regulatory standards, the real test lies in whether DBAY’s ownership can revive Alliance’s profitability—a question that remains unresolved.

In short, the Form 8.5 filing is a minor but telling piece in a larger puzzle. For now, the market’s focus remains on the takeover’s completion—and the uncertain road ahead for Alliance Pharma’s shareholders.

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