Bowing To Pressure, ICN Fine-Tunes Restructuring Plan
Dow Jones Newswires
By Pat Maio Of DOW JONES NEWSWIRES
LOS ANGELES -- ICN Pharmaceuticals Inc.'s (ICN) plan to double the portion of its international business being sold to the public is an attempt to appease shareholders dissatisfied with the company's valuation, analysts said Thursday.
"There are institutions who have owned a big chunk of the stock for many years, and who are now trying to rejuvenate the company in some way," said Herman Saftlas, analyst with Standard & Poor's in New York.
Two dissident shareholders in recent months have pressured ICN Chief Executive Milan Panic, formerly the prime minister of Yugoslavia from 1992 to 1993, to move more quickly on splitting ICN into three publicly traded companies. A plan was initially unveiled last October, but few details have trickled out until Thursday.
ICN said Thursday it plans a public offering of 40% of its international unit in its second quarter, up from 20% planned previously, as part of its program to split into three publicly traded companies.
This stock would be listed on the Budapest Stock Exchange with its global depositary receipts also listed on the London Stock Exchange.
ICN International would handle business mainly in Eastern Europe and Russia. The other two businesses to be carved out of ICN include ICN Americas, which would assume control of other ICN operations in the United States, Canada, Mexico, Puerto Rico and Latin America, and Ribapharm Inc., a research and development arm. Under the proposal, Ribapharm would continue to own the rights to ICN's top-selling product, the hepatitis drug ribavirin.
Many analysts believe Ribapharm is ICN's crown jewel.
"That's where the excitement is," Saftlas said. "The pieces are greater than the sum."
The company declined to shed more light on its updated restructuring plans. "As much as we can say is in the press release," said an ICN spokesman for the Costa Mesa, Calif.-based drug firm.
Richard Stover, analyst with Arnhold & S. Bleichroeder, said ICN's decision to sell up to 40% of the international business in a public offering is meant to attract more institutional investors who would have stayed away from getting involved in a thinly traded company.
Additionally, the greater liquidity of the 40% stake will put the business on a more solid financial footing, Stover added.
Dissident shareholders have been critical of Panic's slowness to split up ICN since the plan was announced last fall.
On Jan. 26, Special Situations Partners Inc., a European investment group controlled by Tito Tettamanti, a wealthy Swiss investor, said ICN should scrap the plans and sell all -- or part of -- the company instead.
Special Situations has submitted to ICN a resolution to be included in the company's proxy materials at its annual meeting in the spring. The shareholder meeting has not been scheduled yet, but Panic has said it will be before May 30.
Early this month, ICN shareholder David Batchelder said he notified ICN in a letter he wants to reclaim his position on the board of the company because Panic had not moved quickly enough to split up the company.
Shares of ICN closed Thursday at $25, down 75 cents, or 2.9%, on volume of 580,000 shares, compared with daily average volume of 695,300. |
