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ICN Offer for Stake in Unit Passes Test

California

Two-thirds of the public shares of Ribapharm are tendered, enough to complete the purchase, valued at $186.9 million.

August 21, 2003|Ronald D. White | Times Staff Writer

ICN Pharmaceuticals Inc.'s offer to buy back the 20% publicly held stake in its Ribapharm Inc. unit was accepted by enough shareholders to allow the $186.9-million acquisition to go through, ending months of legal wrangling, ICN said Wednesday.

Ribapharm holders agreed to sell more than 69% of the shares in question by a Tuesday deadline set by ICN, which offered $6.25 a share. ICN needed 66.7% of the shares to win the agreement of the Ribapharm board.

The two-thirds margin also gave ICN the right to acquire the rest of the shares at the same price, valuing the 20% stake at $186.9 million.

Analysts said the acquisition removed a major stumbling block in ICN's ability to move forward as a company. ICN and Ribapharm, which are based in Costa Mesa, depend heavily on royalties from the sale of the hepatitis C drug, ribavirin.

Last year, ICN sold 19.9% of Ribapharm in an initial public offering and retained the rest of the shares. But under new leadership this year, ICN offered in June to buy back Ribapharm stock at $5.60 a share.

The Ribapharm board rejected that offer as inadequate and adopted a poison pill defense. But a federal judge's ruling last month -- that a generic formulation of the drug would not violate ICN's patents -- sent Ribapharm shares tumbling.

This month, ICN raised its offer to $6.25 and the Ribapharm board said it would drop the poison pill if the offer was accepted by holders of two-thirds of the publicly held shares.

ICN finished the day up 30 cents, or 2%, to $15.05 on the New York Stock Exchange.

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