NEW YORK — Sterling Drug Inc., resisting a takeover bid from the big Swiss pharmaceuticals firm F. Hoffmann-La Roche & Co., on Wednesday attacked Morgan Guaranty Trust Co. for helping in the bid.
Sterling said Morgan Guaranty was acting unethically by advising Hoffmann-La Roche because of its longstanding relationship with Sterling.
"I am shocked and dismayed by what I consider to be Morgan bank's unethical conduct in aiding and abetting a surprise raid on one of its longtime clients," said John Pietruski, Sterling's chairman and chief executive, in a letter to Morgan Chairman and Chief Executive Lewis Preston.
Hoffmann-La Roche launched a $4.2-billion tender offer for Sterling on Monday, a maneuver that bypassed the company's management. Sterling has said it would resist any takeover, according to disclosure papers filed by Hoffmann-La Roche.
Morgan Guaranty, a subsidiary of J. P. Morgan & Co., is acting as financial adviser in the tender offer.
Morgan said it is acting properly as adviser to Hoffmann-La Roche. "Although Mr. Preston intends to respond to Mr. Pietruski directly, I can say that we are acting properly in this transaction," said Morgan spokesman John Morris.
Pietruski said Sterling was carefully reviewing all its dealings with Morgan. He also said he would "bring this matter to the attention of others" who do business with Morgan Guaranty, the nation's fifth-largest bank.
Pietruski said Morgan had advised Sterling for over 50 years and, in consequence, was privy to "our most confidential financial information throughout our relationship." Morgan is also the transfer agent and registrar of Sterling's common stock.
"How many relationships of trust and confidence do you have to have with a client before you consider not embarking on a course of action that could be detrimental to the best interest of your client?" Pietruski wrote.
Analysts expect Sterling to seek a so-called white knight to evade a takeover by Hoffmann-La Roche.
Sterling's stock has been rising steadily since the bid due to an expectation of a bidding war and the belief that the company is worth more than the $72-a-share offer price.
Neil Sweig, drug analyst with Prudential Bache Securities, said Sterling is worth as much as $4.7 billion, equal to $80 a share.
"The odds are infinitesimally small that Sterling will be independent by the end of the year," Sweig said.
Sterling's stock, which rose sharply Monday and Tuesday, closed up $2.25 at $76.375 a share in heavy trading Wednesday. The stock has gained 39% from last Thursday's close before the bid was announced.
Other analysts said Wednesday that another party is likely to come along offering as much as $5.2 billion for Sterling.
The West German chemicals group Bayer AG, which analysts thought might act as a white knight for Sterling, said it was interested in buying back the U.S. rights to its pharmaceutical products, including Bayer Aspirin, which Sterling purchased in 1919.