Galen founder and former president Dr Allen McClay has sold his 6.3 per cent stake in the Northern Irish drugmaker for £97 million sterling (€147 million).

Some 12 million shares were placed yesterday at £8.10 each, on Dr McClay's behalf, by Dresdner Kleinwort Wasserstein in London, market sources said.

The placing was at a 4.5 per cent discount to Monday's closing price of £8.48.

Shares in the Northern Irish firm, which specialises in women's healthcare and contraceptive products, closed lower yesterday, although they finished above the placing price.

In London, where the stock is mainly traded, more than 25 million shares changed hands. The shares closed down 3 per cent on the day at £8.22, while in Dublin they lost 2 per cent to €12.65.

Dr McClay could not be reached for comment yesterday but market sources speculated that the sale might be a preamble to the purchase by Dr McClay of Galen's UK sales and marketing business.

Alternatively, he might be raising money to pay down borrowings incurred in previous purchases from Galen, they suggested.

Dr McClay has bought businesses worth more than €250 million from Galen in recent years. Most recently, he paid €28 million for its development and manufacturing services business in December.

At that time, Dr McClay also raised about £30 million from the sale of 4.3 million of his Galen shares to fund the transaction, cutting his stake to 6.3 per cent from 8.6 per cent in the process.

Galen has been selling what it sees as non-core businesses so that it can concentrate instead on its pharmaceutical products business, which is increasingly focused on the US.

Dr McClay's decision to divest his entire shareholding in the Portadown, Co Armagh-based company, which he founded in 1968 and from which he retired in 2001, came as little surprise to the market.

"It's just a continuation of what he had been doing because he's no longer involved in the day-to-day running of the business," according to Mr John Wilson, an investment director of Standard Life Investments, which owns more than 3 per cent of the company.

"The story is still intact," he said. - (Additional reporting: Reuters)