Rhone-Poulenc Plans Major Reshaping To Life Sciences

In an attempt to avoid its intentions being leaked, French chemical andpharmaceutical company Rhone-Poulenc has revealed that it is examining the possibility of a major refocusing of its business on life sciences, with the continuation of its restructuring process through the possible acquisition of the minority stake it does not own in the pharmaceutical business, Rhone-Poulenc Rorer, and the formation of a new company consisting of chemicals, fibres and polymers, which would be floated in 1998.

R-P owns 68.3% of R-PR, and the acquisition of outstanding shares to give R-P 100% ownership would reinforce the firm's focus on life sciences. Jean-Rene Fourtou, R-P's chairman and chief executive, told journalists and analysts in London that the way he envisages this being done, should R-P decide to proceed, would be to offer the minority shareholders $92 per share, which represents a total price for the acquisition of 25 billion French francs ($4.3 billion), at a premium of 15% to the $79.43 R-PR share price at close of trading on June 25 on the New York Stock Exchange.

R-P would raise 7 billion francs from an increase of its equity towards financing the minority stake buy-out, in addition to an estimated 13 billion francs that will be raised partly from the initial public offering of the new chemicals company, and the divestment of non-strategic assets.