Bergen Brunswig Calls Off Bid for Competitor : Distribution: Orange-based firm indicates the asking price for Foxmeyer Corp. was too rich.

Bergen Brunswig Corp., a major pharmaceutical distribution company here, said Thursday that it has terminated discussions to acquire Texas-based Foxmeyer Corp., one of its biggest competitors.

Also on Thursday, Foxmeyer’s parent company, Pittsburgh-based National Intergroup, announced that its board of directors has unanimously decided to take Foxmeyer off the market and make it the firm’s “core operating subsidiary.”

Melvyn J. Estrin, who on Wednesday was elected chairman of National Intergroup, said the company had received bids for Foxmeyer from Bergen Brunswig as well as several other distribution firms that he declined to identify.

He said all the bids were below the $475-million figure that National Intergroup had set as the minimum acceptable offer.

George E. Reinhardt Jr., Bergen Brunswig’s chief financial officer, confirmed that price had been the stumbling block in negotiating a deal that would have boosted Bergen’s sales by more than half and strengthened its presence in the Midwest.

By acquiring Foxmeyer, the nation’s third-largest pharmaceutical wholesaler, Bergen, the second-largest, would have boosted its drug sales from $3.9 billion to $6.3 billion annually. The combination would have made Bergen nearly the size of San Francisco-based McKesson Corp., the nation’s largest drug wholesaler.

Bergen Brunswig is not currently considering other acquisitions, Reinhardt said.

Reinhardt said National Intergroup’s “valuation expectation was higher than we felt the property was worth” but would not disclose Bergen’s bid. Estrin said Bergen’s offer was “substantially more than $400 million but not the minimum $475 million we originally put on the table.”

Estrin said the bids probably were lower than anticipated because of the slow economy and because the bidders may have thought that National Intergroup, a financially troubled firm in the process of reorganizing, would “liquidate the company at any cost.”

National Intergroup’s decision to stay in the drug distribution business was strongly influenced by Foxmeyer’s improved financial performance over the last year, Estrin said. For its latest quarter ended Dec. 31, Foxmeyer posted operating income of $12 million, up 71% from $7 million in the year-earlier quarter.

National Intergroup put Foxmeyer up for sale last August, soon after a dissident shareholder, Centaur Partners, which had lobbied for such an action, gained a minority position on the Pittsburgh firm’s board.

Estrin, who represents Centaur Partners, acknowledged that in recent months the shareholder group has reversed its position on Foxmeyer. He said National Intergroup still intends to divest other assets, including a Texas company that owns an oil pipeline and its Ben Franklin craft and variety stores.

National Intergroup said it plans to move all of its administrative and corporate offices to Foxmeyer’s existing headquarters office in Carrollton, Tex.

Bob King, Foxmeyer’s chief executive, on Wednesday was appointed president and chief executive of National Intergroup. And Estrin said it is likely that the parent company will change its name to Foxmeyer to more closely identify the firm with its drug distribution business.