Magazine article Drug Topics

Revco Rebuffed but Still Bent on Marrying Big B Rx Chain

Magazine article Drug Topics

Revco Rebuffed but Still Bent on Marrying Big B Rx Chain

Article excerpt

After the board of directors for drugstore chain Big B Inc. spurned a buyout offer from rival drugstore chain Revco D.S. Inc., the response from D. Dwayne Hoven, Revco's president and CEO, was that the courtship wasn't over. But apparently it would not be as affectionate as before.

"We believe our $15-per-share tender offer provides superior value for Big B shareholders," Hoven declared. Despite Big B's "poison pill," he added, "we remain committed to completing a combination of Revco and Big B. We are confident the shareholders of Big B-the owner; of the company-will recognize the superior value of our offer."

The poison pill referred to is Big B's development of a "shareholder rights plan," which enables the drugstore chain"; shareholders to buy extra common stock in the company at a discount, to try to ward off large takeover-intended purchases of stock by a single buyer.

Revco said it has filed a counterclaim to Big B and has made a motion for a preliminary injunction against the poison pill. Revco argued that the poison pill violates Alabama law and that it discriminates against holders of 10% or more of Big B's stock.

A boost to Revco's bid was the expiration of the Hart-Scott-Rodino waiting period, as of Sept. 26. It meant that the government has not extended its antitrust review of the potential merger with Big B.

Revco's Sept. 9 offer for 22 million shares of Big B's stock amounted to $330 million. Revco already owns nearly 1.2 million shares of the Big B company.

Headquartered in Twinsburg, Ohio, Revco lays claim to being the nation's second-largest drugstore chain, with more than 2,200 stores in 14 midwestern, southeastern, and eastern states. …

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