Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

SUPERx RAISES BEGLEY CASH BID TO $14 MIL

Executive Summary

SUPERx RAISES BEGLEY CASH BID TO $14 MIL. from the previous $12 mil. offer, the Phoenix-based chain announced Feb. 18. "First, we are amouncing an increase in our offer from $18.50 to $21 per share," SupeRx said. "We are also extending our new offer from Feb. 23 to March 3." In addition, the revised offer eliminates an earlier provision giving SupeRx the right to refuse to buy less than a majority of the Begley stock. The success of the SupeRx bid will likely hinge on a vote by Begley employees currently vested in the company's thrift plan. Approximately 22% of Begley, or 145,000 shares, is included in the employee thrift plan. The Begley family has already committed its 17% interest to SupeRx. The unsolicited offer was instigated by former CEO Robert Begley, who was ousted by the board from his top operating spot on Feb. 4. His responsibilities as CEO were passed on to board member Tracy Farmer. About three months earlier, the board authorized the sale of 100,000 shares to Farmer at $10 per share. Begley pledged to SupeRx the stock controlled by his family in exchange for a $125,000, one-year employment agreement, which is binding regardless of the takeover outcome. "We believe that Begley shareholders will view our offer of $21 favorably in light of the recent market prices and the current financial situation facing the company and its prospects," SupeRx said. For the third quarter ended Dec. 31, Begley reported flat sales of about $21 mil. and a 52% drop in net income to $300,000. Nine-month sales were up slightly 3% to $58 mil., but net income plummeted 96% to $30,000. Begley stock closed 1987 at $12.50 a share, but had traded above $20 during the year. While Begley's board has not yet responded to the sweetened SupeRx offer, it rejected as inadequate the earlier $18.50 a share offer ("The Pink Sheet" Feb. 1, T&G-11). Noting that the threat of the tender offer had forced the Begley management to review a variety of approaches to protect shareholders, Farmer commented: "We'd much rather be concentrating fully on reversing the financial setbacks sustained under Bob Begley's leadership than investing time and capital in protecting the plan he and Mr. Wolken [who heads SupeRx] have devised to take us over." A former Kroger drugstore exec, Wolken purchased about 50 stores from the supermarket chain when it decided to divest its drugstore business. About half of the SupeRx stores are located in the Phoenix area, with the remainder in Georgia and Alabama. Begley, based in Richmond, Kentucky, operates 43 drugstores, seven institutional pharmacies, six home health enters and 127 dry cleaning outlets.

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

UsernamePublicRestriction

Register

ID1128360

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel