Bergen Brunswig Seeks to Buy Alabama Wholesaler : Expansion: However, the Orange-based drug distributor is now competing with an Ohio firm to buy Durr-Fillauer Medical.
In a bid to expand into the South, Bergen Brunswig Corp. offered Tuesday to buy another wholesaler of prescription drugs in a deal that would be worth about $365 million.
But the prospect, Durr-Fillauer Medical Inc. of Montgomery, Ala., is already entertaining a buyout offer from an Ohio company.
Bergen Brunswig proposes buying all 11.9 million shares of Durr-Fillauer’s common stock for $26 each. The offer came after the close of the markets Tuesday. Durr-Fillauer closed at $22.25 a share, unchanged, while Bergen Brunswig was down 13 cents at $20.25.
“Having your company as part of ours would significantly enhance our presence in the Southeast markets and would represent a very desirable expansion for us,” Bergen Brunswig’s chairman, Robert E. Martini wrote to Durr-Fillauer’s board of directors.
The letter notes that Durr-Fillauer announced on June 2 an agreement to sell its drug distribution business to Cardinal Distribution Inc. in Dublin, Ohio, and spin off its medical-supplies business to its own stockholders.
As part of that deal, Durr-Fillauer stipulated that it be allowed to entertain competing offers, Bergen Brunswig spokesman Thomas M. Daly Jr. said. If the Bergen Brunswig offer were accepted, Cardinal would be entitled to a breakup fee that, based on a complicated formula, would be worth as much as $7 million.
Bergen Brunswig estimates that Cardinal’s competing offer would be worth between $166.5 million and $181.5 million. No one could be reached for comment at Cardinal or Durr-Fillauer on Tuesday about the Bergen Brunswig proposal.
“The price we are offering in our proposal . . . clearly provides significantly greater and more certain value to your stockholders than the proposed transaction with Cardinal,” Martini wrote.
The deal would include employment agreements for Durr-Fillauer’s chairman, W.A. Williamson, and three other top company officers. It would also keep the company’s Alabama headquarters, its corporate name and its civic programs.
Martini states in his letter that he has been courting Williamson and his executives for a decade about the possibility of a union of the two companies. But as recently as October, he said he was told that Durr-Fillauer was not interested. So when the Cardinal announcement was made last month, Martini wrote that “it came as a great surprise and disappointment to me and my colleagues.”
Bergen Brunswig, based in Orange, is one of the nation’s largest drug distributors and the leader in sales to hospitals. It buys drugs from manufacturers and resells them to pharmacies and retailers. The company, which employs 1,400, reported a profit of $64.1 million on sales of $4.8 billion for its latest fiscal year.
Durr-Fillauer, which has 1,300 employees, reported a 1991 profit of $17.5 million on sales of $950.5 million.
In February, Bergen Brunswig sold its 80% interest in Commtron Corp. of Des Moines, Iowa, for $78 million to Ingram Industries of Nashville, Tenn. Bergen said it decided to sell Commtron, the nation’s largest distributor of movie videos, to concentrate on its drug distribution business, which accounts for the vast bulk of its sales.
