Pact With Sanofi Irks Robins’ Other Suitors
A. H. Robins Co.’s acceptance of a merger offer from French drug company Sanofi S.A. drew a hostile reaction over the weekend from the committee representing victims of the Dalkon Shield intrauterine contraceptive device and from the losing suitors in the three-way bidding war.
And an attorney representing outside shareholders of the Richmond, Va.-based pharmaceutical company said he is still evaluating the French offer.
A complex stock transaction included in Sanofi’s offer makes it difficult to evaluate the three competing offers side by side. Although all three bids included the establishment of a court-ordered $2.475-billion trust to pay claims of Dalkon Shield victims, Sanofi’s offer calls for the French company to get a 58% stake in Robins, while the other two would have been 100% takeovers. Robins would then operate as a Sanofi subsidiary, apparently under current management.
Murray Drabkin, attorney for the Dalkon Shield Claimants’ Committee, said the pending deal “appears to be more concerned with the entrenchment of Robins’ management than with the prompt, full and fair compensation for the hundreds of thousands of Dalkon Shield victims.”
Robins filed for protection from its creditors under Chapter 11 of the Federal Bankruptcy Code in 1985 amid mounting injury claims associated with the use of its Dalkon Shield intrauterine birth-control device.
The company has until Wednesday to come up with a bankruptcy reorganization plan, including one that sets up the trust of $2.475 billion for the IUD claimants.
In a statement from its Fort Washington, Pa., headquarters Sunday, Rorer Group Inc. insisted that a merger deal it reached with Robins last summer remained valid and “could not be terminated by Robins” without approval from the bankruptcy court.
“Of the three proposals . . . ours was overall the most beneficial to Robins’ creditors, including the Dalkon Shield claimants, and to the shareholders,” Rorer Chairman Robert E. Cawthorn said. “It’s hard to understand why and how Robins’ board of directors came to select the Sanofi bid, and we are currently evaluating our options.”
American Home Products Corp., the other bidder, issued a statement from New York questioning whether the Sanofi bid was better than its own, which it increased last week just before the Robins board chose the Sanofi offer.
Robert M. Miller, counsel for the Equity Security Holders Committee representing owners of about 60% of the shares of Robins, said that committee was evaluating the Sanofi offer.
“We certainly haven’t given the board our endorsement,” Miller said.
Under terms of the merger, Sanofi would acquire controlling interest in Robins through an American subsidiary, CEVA Laboratories Inc. Robins stockholders would receive 83% of the outstanding stock of the new A. H. Robins, with the remaining 17% retained by Sanofi.
