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ICN Will Sell Larger Stake in Its International Unit

Drugs: The Costa Mesa company will offer 40% instead of 20% under its plan to split into three firms.


ICN Pharmaceuticals Inc., revising its plan to split its business into three separate publicly traded companies, said Thursday it will sell 40% of its proposed ICN International to the public, twice the amount originally announced.

The Costa Mesa drug maker, under fire for not moving quickly enough on the restructuring plans, said it plans to sell the shares in the second quarter and hopes to have the stock listed on the Budapest Stock Exchange.

ICN said it was increasing the shares in the initial public offering to achieve greater liquidity.

Analysts generally shrugged off the announcement.

Tom DesChamps, an analyst with Mehta Partners in New York, said he will remain skeptical of ICN's commitment to restructuring until he sees "some real progress taking place," including pricing the shares of ICN International and another unit, Ribapharm Inc. Ribapharm would own the rights to ICN's top-selling product, the hepatitis drug ribavirin.

First Union Securities analyst Michael Tong said the revisions "didn't look like much," adding he continues to rate the stock at market perform.

The company's stock closed Thursday at $25, down 75 cents, on the New York Stock Exchange.

In recent weeks, two dissident shareholders have expressed concern over the pace of the restructuring. David Batchelder of Relational Investors LLC said he wanted to reclaim his position on the board, an option open to him as part of an agreement last year between his investment firm and ICN. In late January, Cayman Islands-based Special Situations Partners Inc. said ICN should consider scrapping the plans because of the delays and sell the company instead to the highest bidder.

Eric Knight, managing director of Special Situations, called Thursday's announcement "a good first step." He said he expected ICN to use the proceeds from the IPO to pay off $400 million in debt.

ICN agreed in October to split into three companies: Ribapharm, ICN International and ICN Americas, which would assume control of some ICN operations in the United States and Canada, Mexico, Puerto Rico and Latin America.

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