Warner Chilcott Ends Sale Talks, to Pay $1 Billion Dividend
Warner Chilcott has ended discussions about a potential sale of the specialty pharmaceutical company and said it would instead pay out about $1 billion to shareholders as a special dividend.
Warner Chilcott, which makes women's healthcare, dermatology products and other specialty drugs, said in April it would explore strategic options, including a possible sale, and hired Goldman Sachs Group as its financial adviser.
The company's stock was down nearly 6% at $16.75 in extended trading, valuing the company at about $4.2 billion.
Warner Chilcott received takeover bids from three parties, including both private equity and industry buyers, but none of the offers met Warner Chilcott's price expectations, according to a source with direct knowledge of the matter.
The company would have accepted a price in the neighborhood of mid-$20s per share, the source added. The source declined to identify the bidders and asked not to be named because the matter is not public.
Warner Chilcott did not return calls for comment.
The company was taken private in 2004 by buyout firms including Bain Capital, CCMP Capital Advisors and Thomas H. Lee Partners. It returned as a public company two years later, but the private equity firms still own about 30%.
Warner Chilcott said on Tuesday that its board approved a recapitalization plan to raise $600 million in debt to fund a special dividend of $4 per share, or about $1 billion in total.
It expects to pay out the dividend before the end of the third quarter. The company also announced an annual dividend of 50 cents, payable in two equal installments.
