Battle ends dividend at Life Technologies

Shareholder fight for control embroils Rockville company


July 27, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

A Rockville-based specialty chemical maker embroiled in a battle over shareholder control said yesterday that it will no longer pay a quarterly dividend. Life Technologies Inc. had paid a 5-cent dividend for the past eight quarters.

Life Technologies is controlled by Dexter Corp., a Windsor Locks, Conn., company that makes chemicals for the aerospace, food packaging, electronics and medical markets. Late last year Dexter, which holds 71.4 percent of Life Technologies shares, made a bid for the remaining shares, but the investment firm that controls most of them did not like the offer -- initially $37 a share and eventually reaching $39.125.

The investment firm, International Specialty Products Inc., which includes corporate raider Samuel Heyman, controls 25 percent of Life Technologies' shares, which are thinly traded.

By paying out a dividend, Dexter would be "taking money from one pocket and putting it into another," said George F. Shipp, an analyst and senior vice president of Scott & Stringfellow. "And they would be paying Heyman's group money, and you have to assume Heyman and his group and Dexter are not the best of friends. The last thing Dexter wants to do is help Heyman with carrying costs."

This month Life Technologies reported a 3 percent gain in second-quarter earnings of $9.76 million, or 39 cents per diluted share, on revenue of $100.3 million.

Christopher Nolan, vice president of corporate development and investor relations at International Specialty Products, declined to speculate on the reasons for the discontinued dividend other than to say Shipp's analysis showed "sound reasoning."

"We're holding [Life Technologies] for investment purposes, and as investors we are disappointed they are not paying a dividend," Nolan said.

Pub Date: 7/27/99

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