ICN Reportedly Seeking 25% of Schering AG’s Stock
ICN Pharmaceuticals, which earlier this year made an unsuccessful run at Swiss drug giant F. Hoffman-La Roche, has reportedly notified the Federal Trade Commission that it intends to acquire up to 25% of the stock of West German pharmaceutical house Schering AG.
Schering AG, according to a Dow Jones report Wednesday, was told of ICN’s intentions by the FTC and immediately branded the bid an “unwelcome . . . hostile . . . greenmail” attempt. Greenmail is the practice of investing in a company’s stock in hope that the firm will pay a premium to reacquire the shares.
According to the Dow Jones report, Schering was told by the FTC that ICN had registered its intent to acquire at least $15 million worth of Schering stock--about 1% of the company--and reserved the right to boost that to 25% of the company’s shares.
An ICN spokesman Wednesday refused to confirm or deny the report. The Costa Mesa company intends to issue a statement today, the spokesman said. ICN’s stock closed Wednesday in light trading on the New York Stock Exchange at $6.25, down 25 cents for the day.
Schering AG has headquarters in West Berlin and is the seventh-largest international pharmaceutical firm outside of the United States. The company, which is not related to Schering-Plough Corp. of New Jersey, reported 1987 sales of $3 billion and a profit of about $90 million, according to industry analyst Craig B. Dickson of the Interstate/Johnson Lane brokerage in Charlotte, N.C.
ICN has been raising cash for 3 years, largely through debt offerings, and has consistently said it intends to use the money to buy all or part of an international drug firm, which would provide ICN with an international sales force.
The company began buying Hoffman-La Roche shares in September, 1987, and hinted that it intended to acquire the Swiss firm. But in March it sold its 1,308 shares--representing an 8.6% stake in Hoffman-La Roche--for $209 million, netting a reported $30-million profit.
ICN has been embroiled in controversy in the United States for several years over its efforts to market ribavirin, a drug it believes can be effective in combatting acquired immune deficiency syndrome.
Late last month, the company revealed that a federal grand jury in Los Angeles had subpoenaed documents in a “criminal investigation” of ICN’s marketing tactics.
