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ROBINS' FIRST BIDDER, AMERICAN HOME PRODUCTS, DROPS OFFER

Executive Summary

ROBINS' FIRST BIDDER, AMERICAN HOME PRODUCTS, DROPS OFFER nine days after delivering an undisclosed buyout proposal just as Robins was preparing to submit its Chapter 11 reorganization plan. In a terse Feb. 12 press release, AHP said it has "withdrawn the proposal which it had previously submitted to the board of directors of Robins." In a same-day press release, Robins confirmed the withdrawal of the AHP proposal and said it "will proceed to file its plan of reorganization in the near future." Prior to an extension granted the company in order to study the AHP offer, Robins had been scheduled to submit its Chapter 11 reorganization plan on Feb. 5. In the week following the AHP proposal, investment bankers reportedly attempted to top the AHP proposal by putting together a consortium of companies interested in buying components of Robins' business for a total price higher than the AHP offer. The investment bankers were understood to be seeking a price of more than $1 bil. for the Rx segment of Robins by itself, based on the prices recently paid for Flint and American Critical Care. Uncertainties surrounding the Dalkon Shield product liability apparently undermined efforts to initiate a bidding war. However, some of those uncertainties may be cleared up after Robins' reorganization plan is submitted, and the court and Dalkon Shield claimants have had an opportunity to review it. At that point, takeover interest in Robins may be rekindled. Attorneys for the Dalkon Shield claimants appear to be pushing for a sale of Robins to assure cash reserves to pay future settlements. Reports following the withdrawal of the AHP offer indicated claimant lawyers were attempting to blame Robins management for souring the deal.
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