Bergen Bids to Trump Merger of Competitor : Pharmaceuticals: The Orange-based drug wholesaler raises offer for Durr-Fillauer of Alabama by $7 a share in attempt to head off Durr’s pending deal with Ohio firm.

Bergen Brunswig Corp., aggressively trying to expand into the Southeast, raised the ante Tuesday in a bidding war for Durr-Fillauer Medical Inc. by offering to pay $396 million in cash for its Alabama competitor.

The offer to buy the Montgomery company for $33 a share--$7 a share above its previous bid--tops the $30.50-a-share bid from Cardinal Distribution Inc. in Dublin, Ohio.

Bergen Brunswig’s offer came as Durr-Fillauer directors decided to furnish Bergen Brunswig with details of its pending merger with Cardinal. Bergen Brunswig fought unsuccessfully in court for the last month to obtain those documents.

The Orange-based drug wholesaler has been trying to foil Cardinal’s merger efforts ever since that deal was announced in early July. Both suitors are eager to tap into the lucrative drug market in the Southeast.

An acquisition of Durr-Fillauer would boost Bergen Brunswig’s annual revenue to nearly $6 billion from $5 billion a year. A combined company also would be a stronger competitor to industry leader McKesson Corp., a San Francisco company that posted $7.5 billion in revenue on its drug wholesale business.

Bergen Brunswig’s new proposal, replacing a $26-a-share offer, is softening the hostile atmosphere that Bergen Brunswig’s takeover attempt has fostered, analysts said. Until Tuesday, Durr-Fillauer has resisted all Bergen Brunswig overtures.

At least, analysts said, Durr-Fillauer now is willing to listen.

“This has gone a long way to leveling the playing field,” said Steven Huffines, an analyst at Sterne, Agee & Leach in Atlanta. “It went a long way to eliminate any hostile overtones.”

Bergen Brunswig Vice President Jack Fay said the company raised its purchase price four days after it extended its original offer to take over Durr-Fillauer.

Analysts had said the Cardinal proposal, which included tax deferrals for Durr-Fillauer shareholders, made more sense.

Bergen Brunswig’s new offer, which expires Sept. 4, may not be its final bid, Fay said. Executives may change the offer, he said, once they review Durr-Fillauer’s financial condition from the documents they had sought.

“The ball is in our court now,” Fay said. “We have the information and are looking at it now.”

David Berman, Cardinal’s chief financial officer, said his company still is considering its options. He would not say if it will counter the Bergen Brunswig bid.

While a sweetened offer from Bergen Brunswig was expected, the decision by Durr-Fillauer directors to turn over the documents sought by Bergen Brunswig gave the bidding war an unusual twist.

Last week, a judge in Delaware, where Durr-Fillauer is incorporated, ruled that Bergen Brunswig had no right to see documents pertaining to the proposed merger between Cardinal and Durr-Fillauer. And attorneys general in Alabama, Florida and Louisiana were investigating Bergen Brunswig’s offer for antitrust violations.

Before learning of the new offer, Durr-Fillauer decided to hand over the disputed documents to settle the ongoing litigation.

“They wanted to get that part of (the bidding war) behind them,” said Durr-Fillauer spokeswoman Jenny Wall. She said that the company’s directors were not expected to make any immediate decisions on whether to put the Cardinal merger on hold.

She said the board was now considering the Bergen Brunswig offer, something that Bergen Brunswig had been attempting to force the company to do through litigation.

Durr-Fillauer is a prize for whoever purchases it because its core market is in the Southeast, analysts said. Population there is aging faster than in any other area of the country, and older citizens typically need more care and medical products.

Bergen Brunswig, the second-largest drug wholesaler in the United States, would be better positioned to take a run at its top competitor. Likewise, Cardinal’s merger with Durr-Fillauer would create a company with revenue of more than $2 billion a year, giving the new entity the strength to challenge Bergen Brunswig more effectively.

Analyst Huffines said he wasn’t sure how much further the bidding war would go, but he said that the latest offer is getting close to the “ultimate price.”

Already, the battle has pushed Durr-Fillauer’s stock up 44% since July 1.

Don Spindel, an analyst for A.G Edwards & Sons Inc. in St. Louis, said whoever ends up with Durr-Fillauer will find its stock diluted. But the long-term benefits apparently outweigh any short-term fears of picking up an overvalued company, he said.

“It is a very important acquisition,” he said. “An acquisition like Durr-Fillauer only comes around once in a lifetime.”

Durr-Fillauer stock continued to climb. It closed Tuesday at $33.38 a share, up $1.63 a share from the previous day on the NASDAQ system.

Cardinal stock closed Tuesday at $30.50 a share, up 75 cents a share from Monday’s close on NASDAQ. Bergen Brunswig stock, sold on the American Stock Exchange, closed Tuesday, unchanged at $19 a share.