The potential deal, which was reported yesterday by the Wall Street Journal, would confirm speculation that circulated late last month about Warner’s interested in a number of Proctor & Gamble (P&G) drugs including the osteoporosis drug Actonel and the bladder treatment Enablex.
The paper said that Warner will fund the acquisition through a $4bn loan from a number of banks including J.P. Morgan Chase, Bank of America, Credit Suisse, Citigroup, Barclays and Morgan Stanley, and will use the remaining $1bn to service its debts.
The New York Times, which also reported the story, said that the takeover deal would bolster Warner’s product portfolio.
P&G’s unit, which has been earmarked for divestiture since February when the firm told London's Financial Times it would focus on other “high growth” businesses, also makes OTC drugs like Prisolec and Pepto Bismol which most observers believe are a good fit for Warner.
Speculation about an imminent deal intensified in June following a Reuters report that P&G had hired Goldman Sachs to help it sell its prescription brands or find other ways to exit the business.
The following month a number of potential suitors for the drug business emerged including the US drugmaker Forest Laboratories. Warner was also named and, like US investment group Cerberus Capital Management, was said to be in late-stage talks.
Neither P&G nor Warner have yet comment on the takeover speculation.