Shareholders of Brunswig Back Merger Plan

Shareholders at the annual meeting of Bergen Brunswig Corp. on Monday overwhelmingly approved the Los Angeles drug distributor’s proposed merger with National Intergroup Inc., a steel and financial-services company in Pittsburgh.

The merger, which would involve a stock swap valued at $650 million, now awaits approval from National Intergroup shareholders, who will vote on the plan at a shareholder meeting of their own Thursday.

Bergen Brunswig investors voiced little objection to the plan, but several National Intergroup shareholders have said they oppose the merger because they think they could make more money by liquidating their company or selling it on the open market.

T. Rowe Price Associates of Baltimore, which manages 8.4% of National Intergroup’s stock, and Batterymarch Financial Management of Boston, which manages 5.2% of its shares, have said they will vote against the merger. And Leucadia National Corp., a New York financial-services firm with a 7% stake in the steel company, has launched a proxy fight to block it.

Expects Approval

Bergen Brunswig’s chairman and chief executive, Emil P. Martini Jr., appeared undaunted, however, as he faced the 100 shareholders who attended Monday’s meeting. “We think there are a lot more institutional investors (at National Intergroup) in favor of the deal than against it,” he said. “I have no doubt this merger will go through.”

Bergen Brunswig stockholders put 97% of the stock that they control behind the merger plan. The voters represented 9 million, or 74%, of Bergen Brunswig’s outstanding shares.

The merger plan calls for a market-value swap of 1.225 shares of Bergen common shares for each share of National Intergroup common. The merged company would be a holding company called Bergen National Corp. that would oversee the steel and drug-distribution operations of both concerns but would leave the management of both companies “basically intact,” Martini said.

He said National Intergroup would gain by diversifying into the drug-distribution market and that Bergen Brunswig would benefit from the steel company’s plentiful supply of cash.

Trading at $28 a share when the merger was proposed in October, National Intergroup’s stock closed at $30.75 Monday on the New York Stock Exchange. Investors in National Intergroup say they could get from $35 to $45 a share in an open-market sale or by liquidation.