NeighborCare's stockholders are cool to new tender offer

Suitor Omnicare's price draws just 7% of shares

July 02, 2005|By M. William Salganik | M. William Salganik,SUN STAFF

NeighborCare Inc. shareholders aren't rushing to sell their shares to rival Omnicare Inc., which is attempting a hostile takeover, at $32 a share -- a price below its trading level.

Omnicare announced yesterday that only 7 percent of NeighborCare shares have been tendered at $32. The tender offer won't be triggered unless 80 percent of the shares are offered.

In the same announcement, Omnicare extended its tender offer another month. It previously granted numerous extensions while awaiting antitrust review of its initial takeover offer of April 2004.

The Federal Trade Commission indicated on June 16 that it had no objection to the merger. On the same day, Omnicare raised its offer to $32 from the $30-a-share proposal that had been on the table for more than a year.

Analysts predicted the deal was likely to get done -- but more likely at $34 a share, or something close to it. Since the new offer, NeighborCare shares have traded between $33 and $34.

Rather than a tender offer producing a merger, a more likely possibility is that the two companies will agree on a price for NeighborCare, analysts have said.

NeighborCare shares closed yesterday at $33.50, up 33 cents, while Omnicare shares rose 87 cents to close at $43.30.

Both companies declined comment yesterday.

Omnicare, with headquarters in Covington, Ky., is the largest institutional pharmacy in the country, providing prescriptions to about a million nursing home residents.

NeighborCare, based in Baltimore, serves about 300,000 nursing home residents. Combining the companies would allow Omnicare to buy prescription drugs more cheaply and lower costs by shutting down pharmacies.

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