* Zentiva seeks partner to expand in target markets
* Could make big acquisition or merge within 3 yrs
* Repeats full-year view of 20 pct sales rise, 15 pct EBIT
By Jana Mlcochova and Jan Korselt
PRAGUE, Sept 3 (Reuters) - Czech drugs maker Zentiva
<> is seeking a partner in the pharmaceuticals market
to boost its presence in target markets, the company's chief
financial officer said on Wednesday.
Zentiva is the subject of a takeover bid from its largest
shareholder, France's Sanofi Aventis <SASY.PA>, that values it
at 40 billion crowns ($2.33 billion), which the Czech firm has
rejected as too low.
Zentiva's Petr Sulc told Reuters in an interview that in the
next two to three years Zentiva could, however, be taken over by
a bigger sector peer.
He also said the acquisition of a smaller competitor, a
merger of equals, or a "loose partnership" with another firm
were options for the company, which produces cheap copies of
drugs such as paracetamol and ibuprofen.
"A partnership with any (pharmaceutical) company and in any
form is exactly what we're looking for," Sulc said. "In three
years (Zentiva) will definitely be part of something bigger."
"In any case, consolidation will continue, and we want to
actively help it and seek opportunities, as we did so far."
Last year, Zentiva purchased 75 percent of Turkey's
third-largest generics supplier Eczacibasi Generic
Pharmaceuticals, which briefly stalled its capacity for
acquisitions.
Sulc said the Turkish acquisition was no longer an obstacle
for further expansion now Zentiva had absorbed the company,
which generated 29 percent of group revenue over the last 12
months, making Turkey its largest market.
He said he saw Turkey and Russia as springboards for
Zentiva's acquisition efforts which he said could focus on
counties of northern Africa, the Middle East, and post-Soviet
countries.
"We look eastwards rather than westwards and (we rather
look) at systems where there is potential for a higher growth
rate," Sulc said.
Zentiva would consider expanding in Western Europe only if
it could use synergies with a partner which is already
established there.
But Sulc said Zentiva had to tread carefully while it was
the target of a bid.
"We are in a period when there is a valid takeover offer for
(Zentiva), so we must be a bit cautious so that our activity is
not seen as something ... that could thwart the offer," Sulc
said.
Sanofi's offer expires on Sept. 19 and is conditional on the
French maker of original drugs gaining over 50 percent. It now
has 24.9 percent, and is Zentiva's largest shareholder.
Sulc said there were no major synergies between Zentiva and
Sanofi, but Zentiva may look into options for cooperation with
the French company.
OUTLOOK CONFIRMED
Sulc said Zentiva was on track to meet full-year targets of
a 20 percent revenue rise, adjusted for currency fluctuations,
and an operating margin above 15 percent.
"There is nothing that would now mean that we would want to
change, whether upwards or downwards, our guidance for the 2008
results," he said.
Sales in the Czech Republic, Zentiva's second-largest
market, have stabilized after the first quarter, which saw a
squeeze due to a government health-care reform implementing fees
for drug prescriptions.
Sulc said he expected a drop in full-year revenues similar
to last year's 7 percent decrease, with low single digit growth
in the following years.
Zentiva also hopes to boost sales by around 10 percent
annually on the Turkish market, he said.
In Romania, this year's sales growth is likely to compensate
for a 23 percent dip in 2007, when the firm implemented measures
to cap the volume of unpaid bills from distributors.
Zentiva is the fourth-largest listed generics maker in
Europe, with a market value of $2.39 billion, about half the
size of the largest regional peer Slovenia's Krka <KRKG.LJ>.
(Editing by Will Waterman)
