Merger and acquisition news

Corporate Growth Report Weekly, Jul 21, 1995

Medco Research and Repligen call it quits on their merger agreement

Pharmaceutical company Medco Research Inc. based in Research Triangle Park, N.C. and Repligen Corp., a Cambridge, Mass., biotechnology company announced they have nixed their merger agreement in which Medco would purchase Repligen for $515 million in stock. While Repligen said it tried revamping the transaction at a lower purchase price, the two parties still failed to reach an agreement. Repligen indicated it has $14 million in cash on hand, or enough for 12 months.

Addington's Resources CEO backs off offer to acquire company's nonenvironmental subsidiaries

Addington Resources Inc.'s CEO Larry Addington and his two brothers are withdrawing their earlier announced offer to purchase all of the company's nonenvironmental subsidiaries. The company, based in Ashland, Kentucky, is a coal mining company and developer and operator of integrated solid waste disposal systems. Addington said he pulled the offer because "some operations have not achieved the projected profitability upon which the original valuations were based. Addington and his brothers had offered to exchange their own shares of the company's common stock, $5 million cash and other considerations for the company's coal operations, its mining-equipment manufacturing and licensing unit and other operations.

VWR deal to buy Baxter International catches Justice Department's attention

VWR Corp.'s proposed $400 million purchase of Baxter International Inc.'s industrial supply business has attracted the attention of the U.S. Department of Justice which has requested additional information. One reason for the DOJ's interest is that the purchase would double VWR's market share. According to Walter Sobon, CFO at VWR, a West Chester, Pa. manufacturer of laboratory supplies for industrial, educational and government use, the DOJ is also seeking information about Baxter's and VWR's products in order to 'better understand what the combined company will look like." The DOJ is also pursuing information on the proposed investment of $230 million in VWR by EM Industries Inc., a U.S. affiliate of E. Merck Group.

Johnson Industries can not attain an agreement to buy the minority interest in Jupiter National

Johnston Industries Inc., a Columbus, Ga. textile manufacturer reported it has been unable to reach an agreement with Jupiter National Inc. concerning its proposed buyout of Jupiter's minority interest. As a result, the company wants to get majority representation on Jupiter's board. Johnson, had proposed to purchase a 5% stake in Chevy Chase, Md.-based Jupiter that it doesn't already own for $29.50 a share or about $29.5 million. Jupiter owns venture capital and textile operations.

A Jupiter shareholder has filed suit in Delaware Chancery Court against both companies and also two directors of the companies. That suit demands class-action status on behalf of Jupiter's minority shareholders and also protection of minority interests.

Commerzbank AG and Merrill Lynch confirmed that they are interested in Smith New Court

Commerzbank AG of Germany and Merrill Lynch & Co. of the U.S. have confirmed they are each in advanced talks to purchase Smith New Court PLC, a British brokerage company. The firm has a current market value of L346 million ($550.7 million) and a possible sale price ranging from L350 million to L400 million. Commerzbank aims to increase its expansion from the commercial banking arena. If Merrill Lynch is successful, it could realize its goal of becoming the world's dominant securities house.

The Justice Department takes a keen antitrust eye to the Computer

Associates takeover of Legent Computer Associates International Inc.'s proposed $1.74 billion takeover of Legent Corp. has attracted the intense interest of the Justice Department which has expressed concern that the combined company could conceivably monopolize parts of the industry and should divest itself of several high-end mainframe software products. The TD has thus far asked for comments from competitors of the merged company and customers. This preliminary investigative period is "quickly approaching a point where they will make a decision whether to challenge the deal or not" according to one Washington lawyer. As a result Computer Associates has once more extended the deadline on its cash tender offer. Analysts predict that Computer Associates would battle a Justice Department challenge if it should occur. Over 70% of Legent's business volume is in high-end mainframe products which Computer Associates is anxious to market through its sales force. In addition, Computer Associates is also eager to acquire some of Legent's rapidly-growing client-server desktop business. Competitor Sterling Software Inc. based in Dallas Texas is primarily concerned over the system-management software products. Usually these products are marketed in bundles, and Computer Associates and Legent combined would control the market, according to Sturgis Sobin, a Washington attorney representing Sterling. The Justice Department is focusing on a large range of overlapping products of the two firms, including those involved with low-end mainframe applications. Also, customers of International Business Machines Corp. have expressed concern since the merged company would control all the applications for VSE, IBM's low-end mainframe operating system.