Robins Bidders Said to Be Willing to Sweeten Offers

From the Washington Post

A. H. Robins Co.'s proposal to merge with a French pharmaceutical company and emerge from bankruptcy court protection ran into further resistance Wednesday amid indications that the bidding war for the company has resumed.

Robert M. Miller, the attorney for a committee representing holders of about 60% of Robins stock, said in an interview that the committee has told the French company, Sanofi S.A., that its bid for Robins is unacceptable and that "they had to improve the offer monetarily."

"Right now, the (Sanofi) plan is a lame-duck plan," Miller said.

Miller said the committee met Tuesday with representatives of Sanofi and two American drug manufacturers who also have bid for Robins: American Home Products Corp. and Rorer Group Inc.

"All three of the bidders indicated that they were willing to improve and enhance their proposals in order to obtain our endorsement," Miller said. He would not elaborate.

Lawyers for the thousands of women who claim they were injured by Robins' Dalkon Shield contraceptive device have sharply criticized the company's proposal to be taken over by Sanofi. The opposition of Miller's committee casts further doubt on the chances that Robins can obtain court approval for the Sanofi plan without a bitter fight, according to lawyers and other sources involved with the case.

Either the Dalkon Shield claimants or the outside shareholders committee could press Robins to change its mind. Short of that, they could seek permission from the Richmond court overseeing the case to submit a competing plan from a different bidder.

"For anyone to believe that what Robins and Sanofi offered the other day is where this case is going would be a little naive," said Stanley K. Joynes, the lawyer for future Dalkon Shield claimants.

Despite the mounting opposition to the company's plan, a Robins spokesman said the company expected to file a new plan of reorganization Wednesday night with the U.S. Bankruptcy Court in Richmond. The plan incorporates the Sanofi offer and the establishment of a $2.475-billion trust fund for Dalkon Shield claimants.

Sanofi executives were traveling to New York on Wednesday to appear at a news conference today with Robins executives.

Robins has been operating under federal bankruptcy court protection since August, 1985. Any proposal to reorganize the company and allow it to emerge from bankruptcy is subject to a vote by shareholders, claimants and other Robins creditors, as well as approval by U.S. District Judge Robert Merhige Jr., who is overseeing the case.

Robins accepted Sanofi's bid Friday after receiving three offers for the company. Each of the bidders has agreed to set up the trust fund for claimants, as ordered by the judge, but observers say the complex stock transactions involved in each offer make it difficult to compare the three bids.

According to lawyers and other observers, Robins' board appeared to be attracted to the Sanofi bid in large part because of greater guarantees that the current management would retain a major role in running the company as a free-standing subsidiary after merger. The Robins family controls 41% of the company's stock.

However, lawyers for the claimants have criticized the proposed acquisition on the grounds that it would not guarantee prompt payment of claims to Dalkon Shield claimants. And lawyers for the non-family shareholders say their clients would not receive enough under money under the Sanofi plan, which offers $600 million in notes and stock for 58% of Robins' stock. The other two offers are for 100% of the stock.

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