Advertisement

2 Companies Vie for Pharmaceuticals Distributor : Acquisitions: Bergen Brunswig Corp. of Orange says its offer to Durr-Fillauer is still pending, but Cardinal Distribution Inc. says it signed agreement to merge with company.

Share
TIMES STAFF WRITER

Bergen Brunswig Corp. on Friday escalated its campaign to take over a competing pharmaceuticals distributor, but the effort may have come too late: Another contender for Durr-Fillauer said it has already won the war.

Bob Walters, chief executive of Cardinal Distribution Inc. in Dublin, Ohio, said in a telephone interview that his company has signed a definitive agreement to acquire Alabama-based Durr-Fillauer in a stock swap. The deal, expected to be completed by September, would give Durr-Fillauer shareholders Cardinal stock valued as high as $30.50 a share, making the merger worth $450 million.

But in a letter to Durr-Fillauer’s directors, Bergen Brunswig Chairman Robert E. Martini warned the company not to ink a deal with Cardinal before considering Bergen Brunswig’s offer.

Advertisement

The letter did not spell out Bergen Brunswig’s new proposal. An earlier offer was valued at $26 a share, or about $365 million.

Bergen Brunswig has asked a judge in Delaware, where Durr-Fillauer is incorporated, to block the Cardinal deal until Bergen Brunswig’s offer is fully considered.

“We caution you not to take any action, such as entering into any type of ‘lock-up’ or similar arrangement with Cardinal or any other bidder,” Martini wrote in a letter released Friday.

Bergen Brunswig Vice President Jack Fay said that the letter was sent to Durr-Fillauer before company officials received word that Cardinal had signed a definitive agreement. Fay would not comment on that deal except to vow that his company will continue its quest for Durr-Fillauer.

A hearing scheduled for Monday is expected to proceed, Fay said. At that time, attorneys for Cardinal and Durr-Fillauer are scheduled to produce documents on their agreement.

“There will be legal challenges,” Fay said. “It’s hard to tell what is going to happen.”

The pact between Durr-Fillauer and Cardinal differs from one announced June 1. In the initial agreement, Cardinal would have taken over Durr-Fillauer’s drug distribution division but would have spun off its medical-supplies unit. Under the revised plan, Durr-Fillauer would keep its name and its Montgomery, Ala., headquarters but would become a wholly owned subsidiary of Cardinal.

Advertisement

Durr-Fillauer’s shareholders would receive $30.50 worth of Cardinal common stock for each of their shares if the price of Cardinal’s stock is between $28.50 and $31 at the time that the deal closes. If Cardinal’s stock dropped below $28.50 a share, however, Durr-Fillauer shareholders would get as much as 1.0702 shares of Cardinal for each of their shares, company officials said.

Cardinal, traded on the NASDAQ Market, closed Friday at $29.50 a share, down $1.75. Durr-Fillauer, also traded on NASDAQ, gained $2.87 to close at $30.12. And Bergen Brunswig, traded on the American Stock Exchange, ended at $19.25 a share, down 25 cents.

Advertisement