Rhone-Poulenc Pays More For Full Control Of R-PR

French chemicals and health caregroup Rhone-Poulenc is having to pay nearly an extra 2 billion francs ($323.8 million), reaching a total of approximately 27 billion francs, for the 31.9% stake it does not already control in the Franco-American drugs company Rhone-Poulenc Rorer.

Rhone-Poulenc says it is prepared to increase its bid to $97 per share in order to proceed with its strategy of turning into a life-sciences business and spinning off both its chemical and fibers activities (Marketletter July 7). The latest offer follows an opening bid of $92 per share which was rejected by a special committee of directors of R-PR's board.

In giving its recommendation to the latest offer, chairman of the R-PR special committee James Riepe said: "we are pleased with the results of our negotiation with Rhone-Poulenc and believe that this action will serve the best interests of the minority shareholders." The deal benefits both sides, as many investors in Rhone-Poulenc had thought the new price would be higher still.