Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 23, 1994 TAG: 9408230072
SECTION: BUSINESS PAGE: C7 EDITION: METRO
SOURCE: ASSOCIATED PRESS|
DATELINE: NEW YORK LENGTH: Medium
Monday's joint announcement ends nearly two weeks of speculation surrounding Neutrogena, which said Aug. 10 it was discussing a buyout by a larger company.
The $35.25 per share cash bid will be made directly to shareholders in a tender offer, the companies said.
News of the offer sent Neutrogena's shares up $6.03 1/25 to $35.53 1/25 on the Nasdaq. The stock has recently been rising from $21.62 1/2, where it closed Aug. 10 before the announcement of the talks. The deal had little effect on J&J shares, which were up 12 1/2 cents to $49.12 1/2 on the New York Stock Exchange.
The merger, subject to J&J's acquisition of a majority of Neutrogena shares, would allow Johnson to continue its recent expansion of skin care products. Johnson bought the Clean and Clear line from Revlon in 1991 and last year bought RoC, a French company that makes products for women with sensitive skin.
Johnson & Johnson, based in New Brunswick, N.J., also sells such products as the No.1 nonprescription painkiller, Tylenol, the Mylanta stomach medication, Johnson's Baby Oil, Band-Aids and Acuvue contact lenses.
Los Angeles-based Neutrogena is recovering from disappointing sales in Europe, one of its most important regions. Its president of European operations resigned last week without explanation.
Although the purchase will require new debt, the credit rating company Moody's Investor Service immediately confirmed its highest credit rating, Triple-A, for J&J. Moody's said J&J could handle the borrowing, and the strengths of each company appear to be complementary.
by CNB