ICN, Ribapharm Tiff Resumes

The sniping between ICN Pharmaceuticals ( ICN) and its takeover target Ribapharm ( RNA) resumed Wednesday, as ICN accused its fellow drug company of hinting that ICN's buyout offer might go higher.

"We want to be absolutely clear. Our $6.25 per-share cash tender offer is final," said Robert W. O'Leary, ICN's chairman and chief executive, in a prepared statement.

The offer had been raised on Monday to $6.25 a share from $5.60 a share for the 20% of Ribapharm's shares than ICN doesn't own.

ICN argued that Ribapharm -- whose board of directors has declared both offers "inadequate" -- speculated in an Aug. 5 filing with the Securities and Exchange Commission that the buyout price could go higher.

Ribapharm recounted to the SEC the history of the buyout negotiations, noting that its board -- with one dissenter -- agreed to the new terms by removing a poison pill and allowing shareholders to vote on the ICN offer. If two-thirds of the Ribapharm shareholders support the sweetened bid, the board will accept the offer. When the new offer was announced, ICN said 53% of Ribapharm shareholders had agreed to tender for the original price. However, the SEC filing says, Ribapharm's board reiterated its belief that the $6.25 bid is "inadequate." The company said that if the two-thirds vote isn't secured by the new deadline of Aug. 19, "it is possible, though not certain, that ICN might be willing to increase the offer price further."

The SEC filing reveals there was considerable negotiating on a new buyout price, noting that ICN "conveyed that it would withdraw" its offer unless a deal could be settled by Aug. 4.

ICN proposed raising the offer to $5.80 and then to $6.10 on the condition that Ribapharm's board would endorse the deal. Then, on Monday, the company agreed to the terms of $6.25 a share and a two-thirds shareholder vote in return for Ribapharm's withdrawing its poison pill. The agreement raised ICN's buyout cost to $188 million from $168 million. Both companies are based in Costa Mesa, Calif.

ICN spun off Ribapharm as a public company in April 2002, initially keeping 83% of Ribapharm's shares. In early June, ICN said it would make a cash tender offer for the rest of Ribapharm's shares. Ribapharm's board rejected the offer and enacted a poison pill takeover defense that would be triggered when any company acquired 89.9% of the company's shares. ICN sued to block the poison pill.

In midmorning trading Wednesday, ICN's stock was down 2.1%, or 32 cents, at $15.48. Ribapharm's stock was up 1 cent at $6.15.

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