Sanofi, Rorer Group Disclose Enhanced Bids for A. H. Robins

From Reuters

France's Sanofi S. A. and Rorer Group Inc. said Monday that they made new takeover offers for A. H. Robins Co.--once again escalating the bidding war for the bankrupt maker of the Dalkon Shield contraceptive device.

Fort Washington, Pa.-based Rorer said it was raising its offer to about $750 million. The proposal also contemplates the sale of Robins' over-the-counter drug products.

Rorer had earlier offered to buy the company in a stock-swapping deal valuing Robins at $600 million. However, the equity portion of the earlier bid rose to about $730 million earlier this month due to a boost for Rorer stock on speculation that it might also become a takeover target.

Paris-based Sanofi, France's second-largest drug company, said it also raised its bid but would give no details. Late last month, Sanofi agreed to pay $600 million for 58% of Robins and to guarantee bank loans for a $2.475-billion trust to compensate those injured by the Dalkon Shield. The acquisition agreement was contained in Robins' reorganization plan filed earlier this month.

The new offers follow a complex history of merger agreements and revised bids for Richmond, Va.-based Robins, which sought Chapter 11 bankruptcy protection in 1985 because of massive lawsuits by women injured by the company's Dalkon Shield. Robins makes prescription drugs and well-known over-the-counter products that include Chap Stick lip balm and Robitussin cough syrup.

Although Robins' merger with Sanofi is contained in the reorganization plan, the pact was not final and has met with opposition from shareholders and Dalkon Shield claimant groups. This has led to a new round of bidding by three big pharmaceutical suitors: Sanofi, Rorer and New York-based American Home Products.

In the New York Stock Exchange trading, Robins' stock rose 75 cents to $24.875 Monday.

American Home Products Corp. started the new round of bidding last week by sweetening its offer to $700 million, or about $29 a share--up from $600 million. American Home received the backing of Robins' shareholder group, but that loyalty could change as the group studies the new bids.

"The shareholders group is in the process of evaluating the new offers in light of American Home Products' proposal," said Robert Miller, the group's lawyer. "We have not reached conclusion yet as to whether these offers are higher or better." He said the group hoped to make a decision by today.

The shareholders group was dissatisfied with the Sanofi bid, which it valued at between $15 and $16 a share, and has continued to meet with suitors in an attempt to get a higher offer.

While Sanofi would not release details of its new offer, a source close to the negotiations with the suitors said the Sanofi offer sets a $48-per-share target price for Robins stock for five years after the merger is consummated. If Robins' shares are below that level at the end of the five-year period, a dividend will be given shareholders to make up for the difference.

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