Warner Chilcott said yesterday it had received a takeover offer of 837p a share, valuing the Northern Irish speciality pharmaceuticals company at about £1.57 billion (€2.26 billion).
The company said discussions with the interested party, believed to be a consortium led by Goldman Sachs, were continuing.
Warner's shares, which traded at about 550p in August, before bid speculation began, closed up 19p at 837½p.
The company added that it was still talking to two other groups about a takeover.
In September, Warner received an indicative bid from a Goldman Sachs-led consortium at 800p a share; a 30 per cent premium to its pre-bid price. That implied a multiple of 15.5 times underlying 2005 estimated earnings.
Yesterday's announcement was greeted with surprise by those analysts who had expressed doubts that one of the mooted bidders would be prepared to pay more than 800p.
Sceptics pointed to the decision of Irish biotechnology firm Elan, which two weeks ago sold its 4 per cent stake in the pharmaceuticals group, triggering some selling by long-only investment funds.
At the time, more than 23 million Warner Chilcott shares changed hands after the sale of 7.1 million shares at 802p by Elan Pharmaceutical Investments III, an off-balance sheet investment vehicle.
This year, Warner Chilcott changed its name from Galen Holdings to emphasise the increasing US nature of its business. It sold its UK operations last year to focus on its US women's health and dermatology products and its senior executives are based in the US.
If the Belfast-based company is acquired by US venture capital groups, analysts said it would provide further evidence of the steady migration of European healthcare businesses across the Atlantic.
The Goldman consortium is understood to include US buy-out groups Kohlberg Kravis Roberts, Blackstone and Texas Pacific. CSFB Private Equity is also thought to be planning a bid for Warner Chilcott, with a team believed to include Bain Capital, Carlyle Group and Thomas H Lee.
Warner relies on buying in peripheral or soon-to-expire drug franchises from the majors. But many analysts believe its earnings base is not sustainable without acquisitions.
Other investors have raised concerns about the way the company uses a 25-year straight-line amortisation of acquisitions of certain drugs such as Sarafem, a hormone replacement, when the drug is off patent in four years. They question whether the earnings are sustainable in the event of cheap generic competition.
