Unilever Boosts Offer for Richardson-Vicks

The U.S. subsidiary of Unilever said Thursday that it is raising to $60 per share its top offer for all of the common stock of Richardson-Vicks Inc., whose management has opposed the takeover bid.

Unilever U.S. Inc., a unit of the giant Anglo-Dutch consumer products company, said it was boosting its previous top offer from $56 a share provided that the offer was approved by the Richardson-Vicks board.

Unilever said its offer would remain at $48 a share if the Richardson-Vicks board failed to approve the offer.

Richardson-Vicks, a Wilton, Conn.-based concern that rejected Unilever’s earlier offer as “inadequate,” had no comment on the sweetened offer, according to a spokesman for the health and consumer products company. The spokesman, who works for an independent public relations firm, asked not to be identified.

Stock Plan Hearing

While the higher offer was being announced, investment bankers for the two companies were testifying in federal court about a plan by Richardson-Vicks to issue new preferred stock with super voting rights in an effort to thwart Unilever.

Felix Rohatyn, a partner in the investment firm of Lazard Freres & Co., which is working with Unilever, said the plan would in effect transfer control of Richardson-Vicks to the founding Richardson family, which now holds a large minority interest, without forcing the family to pay a premium for that control.

But Martin Siegel, a partner at Kidder, Peabody & Co., which has been assisting Richardson-Vicks, countered that the stock plan was a sound long-term strategy to boost the value of the company’s stock, though at the expense of “short-term speculators” who want to tender their shares in a takeover bid.

The hearing was to determine whether Richardson-Vicks could go ahead with the stock plan.

The proposal would allow stockholders of record as of today to receive preferred shares convertible into a new class of common stock with five times the normal voting strength. But that excess voting power would be suspended for three years if the shares were transferred to Unilever or any other purchaser.

U.S. District Judge Richard Owen issued a temporary restraining order last week blocking the stock plan on grounds that the company needed to seek shareholder approval for it. Richardson-Vicks lawyers urged Owen on Thursday to reverse that position and deny an injunction that would permanently block the plan.

Family Purchases

Richardson-Vicks and members of the descendants of its founding family have bought sizable shares of the company’s stock in an effort to head off a hostile takeover.

As a result of the company’s buy-back efforts, Richardson-Vicks has about 17.6 million shares outstanding, making the value of the bid at $60 a share worth about $1.06 billion, compared to $985 million at the previous top price.

In boosting its top offer, Unilever also reaffirmed its desire to meet with Richardson-Vicks officials at any time and its willingness to discuss “certain tax aspects of the transaction.”

Unilever launched its tender offer Sept. 16. It expires at midnight Eastern time Oct. 11 unless extended.

The latest Unilever offer came a day after the Richardson family reported that it had accumulated more than 36% of the company’s outstanding stock.

In a filing with the Securities and Exchange Commission, the 23-member group said that it, trusts and a foundation under its control had acquired 264,150 shares of Richardson-Vicks’ stock between Sept. 19, three days after Unilever announced its unfriendly bid, and Sept. 24.

Company Buy-Back

As of Tuesday, the company had 17.6 million shares outstanding, including 6.4 million owned by the Richardson family, the filing said.

In the SEC filing, the family said it was “actively considering appropriate steps,” including the purchase of additional shares, to prevent Unilever from acquiring Richardson-Vicks “on terms which aren’t in the best interest of the company.”

Richardson-Vicks itself has staged an aggressive stock buy-back, pulling 5.8 million shares out of circulation since the end of its fiscal year June 30. Five million of those shares have been purchased since Sept. 9, when the company rejected Unilever’s first offer.

On Sunday, the company said it had authorized the expenditure of an additional $50 million to purchase as much as 2 million more shares. Should that goal be reached, the Richardson family’s current stake would increase to 41% of the stock outstanding.

Unilever’s offer is contingent on 51% of Richardson-Vicks’ shares being tendered to Unilever for purchase.