News You Can't Get in PrintBreaking News: What will FTC Make of Novartis-WJ Deal?Sighstreet: New Web Resource for Ophthalmic Professionals |
What will FTC Make of Novartis-WJ Deal?Now that CIBA Vision parent Novartis AG has swept Wesley Jessen off its feet in an 11th-hour takeover bid, the next shoe to drop in this saga may come from the Federal Trade Commission. Some stock analysts say that the agency could force CIBA Vision to sell off part of its colored contact lens business.CIBA Vision’s takeover of WJ would give the combined company a majority share of the $250 million world market for these particular lenses. “It’ll be interesting to see how FTC looks at cosmetic lens sector,” says Hans von der Luft of McDonald Investments in Cleveland. As it is, Novartis’ bid would fashion CIBA Vision into the second largest contact lens company worldwide. Combined, CIBA Vision and WJ would have 28% of the world’s market, pushing it ahead of spurned WJ suitor Bausch & Lomb, which would keep its 18% share, according to industry estimates. Johnson & Johnson tops the list with a 32% share. B&L isn’t the only bridesmaid left at the altar. In accepting Novartis’ bid, WJ pulled its own takeover of Ocular Sciences, paying out a $25 million termination fee. WJ also postponed its annual shareholder meeting scheduled for June 23. Novartis bid $38.50 a share for WJ on the day before B&L’s $35.55-a-share bid was set to expire. That makes the deal worth about $785 million for WJ shareholders vs. the $725 million value of B&L’s offer. It also represents a 17% premium over the $33.18 WJ stock was trading at just before Novartis’ bid. “CIBA Vision is offering an all-cash premium which clearly exceeds Bausch & Lomb’s best and final offer, and the business will immediately benefit from our significantly expanded size and global reach,” WJ Chairman, President and CEO Kevin Ryan says. The move would enable WJ to expand worldwide through CIBA Vision’s international sales force yet bring WJ’s technology in specialty lenses to CIBA Vision. “CIBA Vision and Wesley Jessen expect to achieve substantial synergies in the combined business,” CIBA Vision CEO Glen Bradley says. CIBA and WJ need to tend to some formalities before the takeover is complete. Though WJ’s board of directors has unanimously approved the Novartis agreement—an endorsement B&L never got—it’s subject to 51% of WJ shares being tendered. There are also those regulatory approvals. Both WJ and CIBA say they’ll complete the transaction in the third quarter this year. Combined, the new company would have sales of $1.4 billion a year and 8,900 employees. Mr. von der Luft calls Novartis’ move “somewhat surprising,” considering the contact lens business in the United States is flat. “Maybe Novartis was rethinking its presence in the U.S. and felt that Wesley Jessen would shore up some of their domestic business,” he says.
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| © Review of Optometry OnLine
June 15, 2000 |