Irish pharmaceutical firm Warner Chilcott ends talks with possible buyers

Pharmaceuticals

Dublin-based speciality pharmaceuticals group Warner Chilcott plc (NASDAQ:WCRX) said it had terminated talks with potential buyers and decided instead to pursue other alternatives to boost shareholder value.

At the end of its review of strategic alternatives unveiled at the end of April, the company’s board approved a recapitalisation transaction, a new dividend policy for regular cash dividends and the renewal of its share buyback programme, it said.

Back in April, Bloomberg cited Cantor Fitzgerald analyst Irina Rivkind as saying that a takeover could help Warner Chilcott solve the problems it has with the government which is investigating its marketing practices, as well as other issues, including production difficulties in Puerto Rico and loss of exclusivity over some products.

The report quoted unnamed sources claiming that the Irish group was discussing a deal with sector players and private equity firms.
Warner Chilcott’s board did not reveal any details about the offer talks at the time.
According to Bloomberg data, Warner Chilcott has an enterprise value of USD7.93bn (EUR6.4bn).

Meanwhile, in its current statement the company said it had decided to take USD600m in new debt which it would use together with available cash to pay some USD1bn in special dividends to shareholders before this quarter is out, as well as to pay an annual cash dividend of USD0.50 a share in two installments to its ordinary shareholders.

It had also revised its share buyback programme to allow it to redeem up to USD250m worth of shares apart from the USD88m already repurchased under the existing USD250m programme. This move would be financed with cash from operations, the company said.

Warner Chilcott is focused on women’s healthcare, gastroenterology, dermatology and urology segments of the branded pharmaceuticals market, mainly in North America.

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