Tobacco giant Philip Morris has raised its offer to buy respiratory drug maker Vectura to more than £1 billion.
Vectura makes inhalation drugs and devices to treat respiratory diseases such as asthma, and includes Novartis and GSK among its customers.
Cigarette maker Marlboro increased its offer to £1.65 ($2.29) a share after U.S. private equity firm Carlyle offered £958 million ($1.3 billion) on Friday.
Vectura has not yet responded to a request for comment on the new offer.
The company previously said it supported Carlyle’s offer and was withdrawing its recommendation on Philip Morris’ previous offer.
The London-listed company said Friday that it believes it can better position itself under Carlyle ownership, while noting “uncertainties related to the impact on Vectura’s broader stakeholders arising from the possibility of PMI (Philip Morris) taking over the company.”
Vectura has also agreed to develop a potential inhaled Covid-19 treatment with Inspira, a British pharmaceutical company that specializes in developing therapies for respiratory and infectious diseases.
In a statement, Philip Morris said: “PMI’s (Philip Morris International) enhanced offering values Vectura’s entire issued and to be issued common stock at approximately £1.02 billion ($1.41 billion).”
“PMI intends to operate Vectura as a stand-alone unit that will become the backbone of its inhalation therapy business,” the tobacco company added.
The latest offer represents a 10 pence per share premium to Carlyle Group’s competing offer of £1.55 per share.
The new offer comes after Philip Morris said it could stop selling cigarettes in Britain in 10 years as it focuses on alternatives such as heated tobacco.
The company said it would welcome a government ban on cigarettes and said “strong regulation” was needed to “help solve the problem of cigarette smoking once and for all.”
But charity Ash said it was hard to take such statements seriously from a company responsible for selling more than a tenth of the world’s cigarettes.