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CIBA Vision to acquire Wesley Jessen
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ATLANTA and DES PLAINES, Ill. – CIBA Vision announced on May 30 that it will acquire Wesley Jessen for about $785 million in cash, or $38.50 per share, creating the world’s second-largest contact lens company.
CIBA Vision and Wesley Jessen jointly announced this definitive agreement on the heels of an attempt by Bausch & Lomb to acquire Wesley Jessen for $35.55 per share. Wesley Jessen’s board of directors recommended that shareholders not tender its shares into Bausch & Lomb’s “best and final” offer, which boasted a $1.55 increase over the original bid of $34 per share.
Bausch & Lomb filed a lawsuit against Wesley Jessen, its board of directors and Ocular Sciences, with whom Wesley Jessen had entered a merger agreement on March 20 and in whom Bausch & Lomb had no interest in acquiring. Bausch & Lomb said that the merger was entered into in breach of the Wesley Jessen board’s fiduciary duties “to act on a fully informed basis and to advance the best interests of Wesley Jessen shareholders.” The suit was filed concurrently with Bausch & Lomb’s tender offer for all outstanding shares of Wesley Jessen, which was due to expire May 31.
Ocular Sciences merger terminated
As a result of the agreement with CIBA, Wesley Jessen has terminated the merger agreement with Ocular Sciences, which had been announced March 20. This resulted in a $25 million termination fee, which was paid to Ocular Sciences May 30, a Wesley Jessen spokesperson said.
Kevin Ryan, Wesley Jessen president and chief executive officer, said the company is very excited about the transaction with CIBA Vision. “ … the business will immediately benefit from our significantly expanded size and global reach,” he said.
CIBA Vision Chief Executive Officer Glen Bradley said that the company first approached Wesley Jessen approximately 1 month prior to the May 30 announcement, coinciding with April 24 wire reports that Wesley Jessen had commenced discussions with a third party.
Wesley Jessen’s product line as well as its geographic location complements those of CIBA Vision, Mr. Bradley said. “Wesley Jessen has about 60% of its sales in the United States, 40% internationally; we have about 40% in the United States and 60% internationally,” he told Primary Care Optometry News. “We just feel there are many sales synergies with its product line through the international markets.”
The acquisition creates a strong presence in the contact lens market, Mr. Bradley confirmed. “It puts us in a position where we can challenge the leadership,” he said. “Johnson & Johnson [the parent company of Vistakon] has about 33% of the total sales in the industry. We’ll be in a strong #2 position, and that’s going to make for a much more competitive marketplace.”
Retaining Wesley Jessen products
CIBA Vision has no present plans to discontinue any Wesley Jessen products, Mr. Bradley said, and it is likely that the product line will be expanded in the future. He said that while no decisions have yet been made regarding the company name, “we don’t want to lose any trade equity, any brand equity,” he noted. “We’ll treat that very seriously before we make a decision.”
Holly Houston, director of media relations for Bausch & Lomb, said that the announcement came as a surprise. Bausch & Lomb learned of the acquisition “the same time everyone else did,” she said.
That day, Bausch & Lomb issued a press release announcing the withdrawal of its tender offer. “In the event that the transaction between Wesley Jessen and CIBA Vision is not completed, we would consider renewing our tender offer at a similar price,” the company said in a statement. Wesley Jessen’s spokesperson said that the company has achieved the best price for its shareholders, calling it “head and shoulders” above the Bausch & Lomb offer.
CIBA Vision commenced a cash tender offer for all outstanding Wesley Jessen common shares within 5 days of the announcement. The offer is subject to 51% of the Wesley Jessen shares being tendered and the expiration or termination of regulatory reviews. The transaction is expected to be completed in the third quarter of 2000.
For Your Information:
- Kevin Ryan is president and CEO of Wesley Jessen. He may be contacted at 333 East Howard Ave., Des Plaines, IL 60018-5903; (847) 294-3000; (800) 348-9595; fax: (847) 294-3962; www.wesley-jessen.com.
- Glen Bradley is president and CEO of CIBA Vision Corp. He may be reached at 11460 Johns Creek Pkwy., Duluth, GA 30097; (678) 415-3646; fax: (678) 415-3592; www.cibavision.com.
- Holly Houston is the director of media relations for Bausch & Lomb. She may be contacted at One Bausch & Lomb Place, Rochester, NY 14604; (716) 338-8064; fax: (716)338-0317; e-mail: holly_houston@bausch.com.