2 resign from board of Life Technologies Dexter bid undervalues company, they say


November 06, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

Two members of Life Technologies Inc.'s board of directors resigned yesterday, saying it had become untenable for them to continue serving in the face of heavy-handed tactics used by Dexter Corp. in its efforts to take full control of the Rockville-based company.

Frank E. Samuel Jr., president of the Edison Biotechnology Center in Cleveland, and Iain C. Wylie, a London-based biotechnology industry consultant, said in their resignation letters they believe Dexter's $37-a-share offer significantly undervalues Life Technologies.

Dexter announced Oct. 29 that it would attempt to take full control of Life Technologies in a tender offer to minority shareholders for the 48 percent of the company that it does not already own.

Life Technologies makes biological research supplies.

In September, a committee appointed by Life Technologies' board recommended that shareholders reject Dexter's original $37-per-share offer, made in July.

Analysts say Dexter, based in Windsor Locks, Conn., is seeking full ownership of Life Technologies to boost its own revenue and profitability.

Dexter, which makes specialty chemicals for the aerospace, food packaging, electronics and medical markets, booked a 1997 profit of $56 million on sales of $1.15 billion.

In their resignation letters, filed yesterday with the Securities and Exchange Commission as an amendment to Dexter's tender offer notice, Samuel and Wylie said they also resigned because K. Grahame Walker, chairman of both Dexter Corp. and Life Technologies, had disbanded without notice the independent committee they sat on that was charged with assessing Dexter's offer.

Michael Freitag, a Dexter spokesman, said yesterday that the company believes its bid is a "full and fair offer" to shareholders. He said the company declined to comment on the specifics of Samuel's and Wylie's resignation letters.

Joseph Stokes, chief financial officer for Life Technologies, said he could not comment on the resignations but that the company would make a statement in a filing with the Securities and Exchange Commission within the next 10 business days.

Samuel, a Life Technologies board member since April 1996, said yesterday that "it was my conclusion that my ability to represent the public shareholders had been substantially curtailed and there was no point in being on the board."

Also, said Samuel, he believed that Dexter's $37-per-share bid "was not a good price" for minority shareholders and that "Dexter wasn't making any offers to negotiate."

In his resignation letter, Wylie said, "It has been hard for me to understand Dexter's unwillingness to become involved in the evaluation of what is likely to be its major business in the future and to continually ignore the bases for our conclusions."

According to a statement by the committee appointed by the board to review Dexter's July offer -- made up of Samuel, Wylie and Life Technologies Director Thomas H. Adams -- Dexter's $37-per-share offer was rejected based on an analysis of Life Technologies' value conducted by Goldman Sachs & Co. Goldman Sachs put Life Technologies' value at $36.32 to $51.81 a share -- and said that that valuation was "conservative."

The Wall Street institution was hired by the committee to come up with a fair market value and negotiate with Dexter's financial advisers, Merrill Lynch & Co., after Dexter's original offer in July.

According to the committee's statement, Merrill Lynch objected, saying the share price should reflect certain issues facing the company, including the economic downturn in Asia and whether Life Technologies could successfully commercialize products in its development pipeline.

But in its statement, the committee also disclosed for the first time that in September the committee was approached by another suitor interested in buying Life Technologies.

The committee did not identify that party, but said that it &L expressed an interest in buying all of Life Technologies shares "at a price in excess of Dexter's $37-a-share offer."

The committee said it could not act on that offer because Dexter had previously stated it was not interested in reducing its majority stake.

Aside from owning 52 percent of Life Technologies shares, four Dexter executives sit on Life Technologies' nine-member board of directors.

Shares in Life Technologies closed yesterday at $37.4375, up 25 cents. Dexter shares closed at $32, up 87.5 cents.

Pub Date: 11/06/98

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