Drugmaker shares slump as efforts to find buyer come to naught

Warner Chilcott Plc, a drugmaker specialising in women’s health and dermatology, saw its share price decline the most in nine months after it ended efforts to find a buyer for the company.

It fell 6.6% in early trading in New York after sinking as much as 8% in its biggest intraday drop since Nov 9. The drugmaker said in April it was weighing options including a sale. Bloomberg reported the Dublin-based company had received interest from strategic and private equity buyers.

Chief financial officer Paul Herendeen, who was not more specific about the possible buyers. said on a conference call: “Multiple parties expressed what I would describe as bona fide interest in acquiring Warner Chilcott. We concluded that this is a better pathway to the creation of long-term shareholder value.”

Warner Chilcott will renew a $250m (€202m) share buyback programme, and expects to pay a special cash dividend of $4 per share, the drugmaker said yesterday. It also repeated its previous annual forecast of $3.55 to $3.65 a share.

“It seemed clear that the attempts to be bought by someone had stalled,” said James Molloy, an analyst with ThinkEquity LLC. The drugmaker paid a special $8.50 dividend in 2010, so Mr Molloy said he was not that surprised by the announcement.

“It’s certainly a play they’ve used before.”

Warner expects to fund the dividend with available cash and $600m in new debt, the company said.

Shares rose 17% this year through yesterday.

A group including Thomas H Lee Partners LP, Bain Capital LLC, and the buyout units of JPMorgan Chase & Co and Credit Suisse Group AG took the drugmaker private in 2005 for about £1.6bn (€2bn) and brought it public again in 2006. Credit Suisse sold its stake in 2010.

— Bloomberg