Specialty pharmaceutical company Warner Chilcott Plc (WCRX: Quote), which put itself for a potential sale in late April, has Tuesday shelved its plans to sell itself and ended all talks with potential buyers. Further, its board approved a recapitalization deal, a new cash dividend policy and a renewed existing share redemption program in a bid to boost shareholder value.
The company said on April 30 that it is exploring a broad range of strategic alternatives to enhance shareholder value, including a potential sale of the company, after receiving interests from strategic and private-equity buyers.
The company was also then said to be mulling a dividend payment as an alternative to a sale. It also retained Goldman Sachs Group, Inc. (GS) as its adviser.
The company has for some time been grappling with declining sales of its osteoporosis drug Actonel and increased generic competition in the U.S.
The Dublin, Ireland-based company, which specializes in women's health care, dermatology, urology and gastroenterology, said it will pay special cash dividend of $4.00 per share, or a total of about $1.0 billion to its ordinary shareholders before the end of the third quarter of 2012. The dividend will be funded by 600 million of new debt and available cash.
According to a new dividend policy, the company intends to pay a total annual cash dividend of $0.50 per share to its ordinary shareholders in two equal half-yearly installments of $0.25 per share, with the first payment to be made in the fourth quarter of 2012.
Further, Warner Chilcott also said its share redemption program has been renewed, with the company now being allowed to redeem up to an additional $250 million of its ordinary shares. The renewed program will terminate on the earlier to occur of December 31, 2013 or the completion of redemption.
Previously, the company was earlier allowed to redeem only up to an aggregate of $250 million of its ordinary shares and terminated on the earlier to occur of December 31, 2012 or the completion of redemption. The company has already redeemed about $88 million of its ordinary shares under the program.
The company also backed its adjusted cash net income guidance for the full-year 2012 in a range of $3.55 to $3.65 per share. On average, 18 analysts polled by Thomson Reuters expect the company to report earnings of $3.45 per share for fiscal 2012. Analysts' estimates typically exclude special items.
Warner Chilcott was taken private in 2005 by a buyout group including Thomas Lee Partners LP, Bain Capital LLC, JPMorgan Chase & Co. (JPM) and Credit Suisse Group AG (CS). The company went public again in 2006. The company acquired Procter & Gamble's (PG) branded pharmaceutical business for $3.1 billion in October 2009.
WCRX closed Tuesday's regular trading session at $17.77, up $1.16 or 6.98% on a volume of 4.15 million shares. However, the stock lost $1.02 or 5.74% in after-hours trading.
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by RTT Staff Writer
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