Johnson & Johnson, King Pharma buyouts considered done deals; InfoGroup founder explores sale

By Cristal Cody

New York, Dec. 22 - Two companies on Monday moved in favor of extending takeover offers until after Christmas Day.

Johnson & Johnson extended its $25-a-share cash tender offer for Omrix Biopharmaceuticals Inc. until Dec. 26.

King Pharmaceuticals Inc. also extended its $37-per-share buyout offer for Alpharma Inc. until Dec. 29.

In other deals on Monday, InfoGroup Inc.'s major shareholder and company founder bargained for a sale of the company.

Overall, trading volumes were low Monday for the start of the short holiday week, but a somber Wall Street pushed markets down on Toyota Motor Corp.'s announcement it would post its first operating loss in 70 years.

The Dow Jones Industrial Average fell 59.42, or 0.69%, to 8,519.69, for the fourth straight daily loss.

The Standard & Poor's 500 index slipped 16.25, or 1.83%, to 871.63, and the Nasdaq Composite index fell 31.97, or 2.04%, to 1,532.35.

J&J extension

As of Friday, 23% of Omrix shares have been tendered in the $438 million deal from Johnson & Johnson.

Though few shares have been tendered, confidence is high the deal will close.

"It's a done deal," said Vivian Cervantes, an analyst with Rodman & Renshaw.

The various holidays from Hanukkah to Christmas Day could be behind the small turnout.

"December is always a tough time. You slow down during the holidays," she said.

Still, she doesn't put much meaning in the extension.

"The stock is behaving as if it's a done deal," Cervantes said. "My expectation is the deal is going to be completed."

Johnson & Johnson shares rose 9 cents, or 0.15%, to close Monday at $58.93.

Omrix shares inched up 3 cents, or 0.12%, to close in on the bid price at $24.98.

Johnson & Johnson also has a $31-a-share cash tender offer open for Mentor Corp. through Jan. 12.

The $1.07 billion deal is expected to close in the first quarter of 2009.

King waits for Alpharma

King Pharmaceuticals' buyout offer for Alpharma was set to expire Dec. 19.

About 92% of shares have been tendered in favor of the buyout as of Friday, King said.

The deal is considered as good as wrapped up.

"That's what I'm counting on," said Scott Henry, an analyst with Roth Capital Partners. "I don't see any reasons why it won't go through."

Bristol, Tenn.-based King and Bridgewater, N.J.-based Alpharma reached the $1.6 billion cash takeover offer in November.

Alpharma shares rose 20 cents, or 0.55%, Monday to close at $36.45.

King's stock fell 3 cents, or 0.29%, to $10.18 in trading Monday.

InfoGroup founder says sell

The founder of Omaha-based InfoGroup said Monday that the company should consider alternatives, including selling the entire company.

Vinod Gupta, who controls 40% of InfoGroup's stock, also said he is exploring a proposal to acquire outstanding shares but would be willing to sell his family's shares of the company.

"I believe that the InfoGroup stockholders would benefit from a cash or liquid stock proposal for their shares," Gupta said in a statement. "I am exploring working with an equity partner to make a cash proposal for the company to the board of directors. However, I want to emphasize that I would also be willing to sell my shares for liquid stock or cash if that proves to be the best transaction for all the stockholders of the company."

Gupta was forced out as chief executive and chairman earlier this year after a shareholder lawsuit brought by investment manager Cardinal Value Equity Partners and hedge fund Dolphin LP.

An internal investigation found that Gupta spent corporate funds on vacation homes, a yacht, autos and air travel.

Bernard Reznicek, chairman of the InfoGroup's board, said in a statement in response to Gupta's proposal that it would explore a sale, although "the present economic environment in general and capital markets in particular suggests that this would be a challenging time to try to maximize shareholder value by selling the company."

The company's independent directors will review with independent financial adviser Evercore Partners its current and projected operation results and general market conditions to determine the best strategy.

Investors liked the founder's words and sent the stock up 38 cents, or 9.62%, to close at $4.33. The stock has traded as low as $2.30 and as high as $9.54 over the past year.

Mentioned in this article:

Alpharma Inc. NYSE: ALO

InfoGroup Inc. Nasdaq: IUSA

Johnson & Johnson NYSE: JNJ

King Pharmaceuticals Inc. NYSE: KG

Omrix Biopharmaceuticals Inc. OMRI

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