Vaccine maker's shares rise as acquisition price falls; North American sale put at $390 million; Health care


Shares of North American Vaccine Inc. rose sharply yesterday in active trading after the company said it found financing and agreed to reduce the price of its acquisition by Baxter International Inc., a move Baxter sought after North American failed to meet key conditions of the original deal.

Under the revised agreement, Baxter would pay $6.73 per share for North American, down from $7. Shareholders would get 3 cents per share in cash and the rest in Baxter common stock. The deal, when debt to be assumed by Baxter is included, was valued at roughly $390 million yesterday, said analyst Vandana K. Bapna of Offutt Securities.

Shares of the Columbia-based vaccine maker rose $1.4375 yesterday to $4.3125 on volume of 528,700 shares, more than four times the stock's average daily trading volume over the past six months.

It is still far from certain, however, that the acquisition will be completed.

Baxter, the Deerfield, lll., manufacturer and marketer of health care products, has not waived conditions that North American complete manufacturing of a two-month supply of its meningitis vaccine and gain approval to sell the vaccine in the United Kingdom. North American has yet to succeed in doing either, though Chief Executive Officer Randal Chase said yesterday, "We're optimistic about bringing closure on both these points."

Under the revised agreement, Baxter can waive compliance with the two conditions if North American fails to meet them or walk away from the deal. In addition, the acquisition must be approved by shareholders, though BioChem Parma Inc. and Frost-Nevada Partnership -- which together own about 47 percent of North American's outstanding shares -- have committed to voting in favor of it.

The deal is scheduled to close by June 30.

North American did succeed in satisfying a $20 million Bank of America loan guaranteed by Baxter. The loan, whose maturity date was extended six times, most recently was due Monday.

BioChem Pharma assumed the loan, releasing Baxter from its "They're walking on knives financially."

Vandana K. Bapna, Offutt Securities analyst

guarantee, and committed to providing another $20 million for company operations, Chase said. Investor Dr. Phillip Frost committed an additional $5 million.

Yesterday, Bapna said the short-term financing was a positive development. But she noted that North American already has significant debt.

"In case the deal doesn't go through, the company will have to figure out other ways to finance things. It seems very difficult right now," Bapna said. "They're walking on knives financially."

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