Alliance Pharma has received a £349.7m takeover offer from its largest shareholder, DBAY Affiliates, in a move which could see it leave the AIM market.

The offer, which is valued at 62.5 pence per share, represents a 41% premium on the healthcare group’s share price at closing yesterday.

Alliance Pharma, headquartered in Chippenham, sells over the counter and prescription drugs around the world, with brands including Lypsyl, Kelo-Cote and Anbesol.

DBAY said that it had "followed Alliance’s story for several years" and started to acquire shares in the firm in December 2022.

It said that it was "supportive" of the firm’s leadership team and future prospects, but believes that it needs to implement a “range of operational and strategic initiatives” in order to fulfil the growth potential of the business.

DBAY added that it believes the future prospects of Alliance and its employees would be "better served in a private entity, with a supportive majority shareholder", along with access to additional financing sources.

Non-executive chairman at Alliance, Camillo Pane, said: "Since IPO, Alliance has grown to become a globally diversified player in the consumer healthcare market. Alliance now has several leading brands across its priority categories and a global operating platform.

"Whilst the board has confidence in Alliance's strategy and team, many of the planned initiatives are at a relatively early stage, retain an element of execution risk and will take time to deliver value. The board of Alliance believes that the offer from DBAY represents an attractive and certain value in cash today for our shareholders."

Investment director at AJ Bell, Russ Mould, concluded: "The ranks of the AIM market will be further thinned as Alliance Pharma looks set to succumb to a bid from its largest investor.

"Alliance, which supplies over-the-counter drugs and has an international footprint, has had an up and down time as a public company and shareholders may welcome the opportunity to exit at a premium – even if the offer is some way below the shares’ 2022 peak.

"However, the departure of a profitable and well-established business is hardly good news for London’s challenged junior market."

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