Schering-Plough Plans 2-for-1 Stock Split, Names Richard Kogan Chairman
Bloomberg News
September 23, 1998, 12:06 p.m. ET
Schering-Plough to Split Stock, Names Kogan Chairman (Update4)
(Updates share activity.)
Madison, New Jersey, Sept. 23 (Bloomberg) -- Schering-Plough
Corp., maker of the world's best-selling allergy drug, Claritin,
said it plans to split its stock 2-for-1 and its chief executive,
Richard Jay Kogan, will get the added title of chairman.
Kogan, 57, will become chairman Nov. 1, taking over from
Robert Luciano, 64, who is retiring. Raul Cesan, 50, now
president of drug operations, will become the company's president
and chief operating officer, the No. 2 position.
The split will be the second for Schering-Plough in a year
and a half, a period in which its stock price has more than
doubled. It previously split its shares 2-for-1 in June 1997. The
new split will be on Dec. 2 to shareholders of record Nov. 6.
Schering-Plough's profits are rising as it uses advertising
to boost sales of its top seller, Claritin. The 4-year-old drug's
sales rose 50 percent to $1.7 billion in 1997. Kogan said the
decision to split the shares reflects the drugmaker's financial
strength. He reiterated the company's expectation for about 20
percent earnings growth this year.
''Schering-Plough likes Christmas to come early,'' said
David Saks, an analyst with Gruntal & Co., who has a ''strong buy
on the Madison, New Jersey-based drugmaker. ''They're very
shareholder-driven.''
Schering-Plough shares rose 1 7/8 to 103 1/2 in midday
trading. The share price has doubled in the past year. The
Madison, New Jersey-based company said it had about 730.3 million
shares as of Aug. 31.
Rival drugmakers Merck & Co. and Pfizer Inc. also could
split their shares as rising drug sales boost profits, Saks said.
Merck, which rose 3/16 to 136 13/16, might split if the price
reaches about 150, he said. Pfizer, maker of the impotence pill
Viagra, rose 1 3/4 to 103 3/16. Pfizer reached a record 121 3/4
in April on prospects for Viagra sales.
Not Looking for Mergers
With Kogan as chairman, the company will continue to grow by
focusing on its pharmaceutical operations and marketing, Kogan
said in an interview. It likely won't look to mergers or
acquisitions, such as rival American Home Products Corp.'s
planned $40 billion combination with Monsanto Co.
Schering-Plough studied whether it would be large enough to
stand alone as rivals consolidated, Kogan said. ''We've looked at
the issue and the answer is a clear yes,'' he said.
The company will continue to grow through alliances with
other drugmakers, such as its partnership with ICN
Pharmaceuticals Inc. for hepatitis drugs, he said.
Schering-Plough's own growth is at least partly because of
the leadership of Luciano, the current chairman, Kogan said.
Luciano will remain on the board following his retirement.
Appointment Expected
Kogan's eventual appointment as chairman was expected for
some time, as was the stock split, said Hemant Shah, an
independent analyst. ''Kogan and Luciano worked as a team at
Schering-Plough,'' Shah said.
Kogan said Luciano recruited him to join Schering-Plough in
1981 and Kogan joined several months later in 1982. The two men
had worked together at Ciba-Geigy Corp., which later merged with
Sandoz and became Novartis AG.
Luciano ''took a $1.8 billion (1982) sales company, with
interests in radio stations, home repair products, sandals and
cosmetics, and shaped it into a focused, research-driven
pharmaceuticals company that in 1997 posted sales of $6.8
billion,'' Kogan said in a statement.
Schering-Plough's president-elect, Cesan also comes from the
company's drugmaking operations. He joined Schering-Plough in
1977 as director of finance and administration for the company's
Latin American region. In 1992, he became president of Schering-
Plough Pharmaceuticals.
--Kerry Dooley in the Princeton newsroom (609) 279-4016 with |
