5 April 2012 – acquisition/rights issue

The group has announced the acquisition of Eurovet Animal Health, a Dutch-based veterinary pharmaceuticals business for €135m.  This will be funded partly by a rights issue to raise £60m on the basis of 3 new shares for every 10 shares at a price of 300p.  The acquisition is expected to be earnings enhancing in the first full year of ownership, excluding integration costs, and will the enlarged group will benefit from a number of synergies going forward.  We maintain our buy recommendation and suggest that shareholders TAKE UP THE RIGHTS.