American Home Tight-Lipped About Dropping Robins Offer
After proposing last week to buy A. H. Robins pharmaceutical company and compensate women injured by Robins’ Dalkon Shield birth-control device, American Home Products Corp. abruptly withdrew its offer Thursday.
In a brief statement, New York-based American Home gave no explanation for ending its offer to acquire the drug company now in bankruptcy proceedings because of lawsuits over the Dalkon Shield. American Home treasurer William Emswiler would not comment.
However, Ron Nordmann, a pharmaceutical analyst at Paine Webber Inc., said American Home Products was privately indicating Thursday that the deal fell through because it was “unable to clarify uncertainties” regarding its liability to women claimants.
Robins officials also would not comment. But lawyers representing the injured women blamed the Richmond, Va.-based pharmaceutical company for scuttling the deal.
No Impediment
“It’s perfectly clear that the issue of Dalkon Shield claims was not an impediment to the acquisition of Robins,” said Murray Drabkin.
“American Home Products had reached an agreement with the claimants committee with which both it and the committee were entirely comfortable,” Drabkin continued. “The committee supports the sale of A. H. Robins as the best solution to an otherwise intractable problem.”
Details of the buyout proposal by American Home Products, whose products include Anacin, Dristan and Preparation H as well as Chef Boy-Ar-Dee and Jiffy-Pop popcorn, were never released. But Wall Street analysts had speculated that American Home would pay between $1.8 billion and $2.2 billion for Robins.
In addition, the deal was estimated to have included a trust fund of about $1.5 billion to satisfy the valid claims of the more than 320,000 woman who responded to a court-ordered campaign to find women who claimed to have been injured by one of the 2.2 million Dalkon Shields sold in the United States between 1971 and 1974.
New Reorganization Plan
Robins, which began as a drugstore in 1866, expanded in the past century into a global pharmaceutical firm that markets such well-known products as Robitussin cough remedies and Chap Stick lip balm. The firm sought bankruptcy production in August, 1985, following a flood of lawsuits by women who had claimed to be injured by its Dalkon Shield intrauterine device.
Robins said in a statement that it will submit a reorganization plan to federal court soon. The plan, which Robins said would address all claimants and creditors, had been postponed after American Home’s takeover offer just eight days ago.
In composite trading on the New York Stock Exchange Thursday, A. H. Robins closed at $15.50, down $6.50, while American Home closed at $82.125, up $0.75.
