NeighborCare Inc.'s chairman and chief executive, John J. Arlotta, urged shareholders yesterday to resist a $1.3 billion buyout offer from a competitor, assuring them that their patience would be rewarded.
"The greater value of this company is down the road," Arlotta told the audience. "We cannot get distracted."
NeighborCare held its meeting a day after the institutional pharmacy company rejected for the third time a $30-a-share offer from Omnicare Inc., a larger competitor based in Covington, Ky., that launched its takeover bid March 30.
Shares of NeighborCare reached a high yesterday, closing up 48 cents at $31.33. Shares are up 84 percent since May 20, when the stock traded at a $17.02 low.
Yesterday, in a full-page advertisement in The Sun, Omnicare stepped up the pressure, challenging NeighborCare executives' rosy assessment of the company's future.
"After disappointing twice since May 12, how can shareholders expect NeighborCare to deliver on its new highly aggressive and unrealistic projections?" it asked.
"Send a strong message to your board of directors that you, the real owners of the company, want to receive maximum value now for your NeighborCare investment," the ad said. "Let the board know that they are depriving you of value and should meet with Omnicare to discuss the offer. This combination is too compelling to ignore."
An Omnicare spokesman declined to comment further.
The annual meeting was NeighborCare's first since its former parent, Genesis Health Ventures Inc., split late last year into two independent companies, NeighborCare and Genesis HealthCare Corp., a nursing home company.
NeighborCare is the country's third-largest provider of institutional pharmacy services to the elderly and long-term care facilities.
Despite the intensifying takeover fight, NeighborCare's highly anticipated annual meeting proved to be routine, surprising even the company.
Expecting a large crowd, NeighborCare officials moved the meeting from its downtown headquarters on Pratt Street to the Baltimore Marriott Waterfront. But only about 50 people, including NeighborCare executives, attended.
Wallace Kleid, who holds 350 shares, was critical of NeighborCare's outright rejection of Omnicare's offer.
"It has been dismissed out of hand," Kleid said. "I think you ignore shareholders. I think they should have at least entered discussions with them."
Omnicare's offer expires July 7 unless it is extended.
Arlotta defended the company's business plan for improved performance. He expects revenue to grow to about $2.5 billion by 2007, a 67 percent increase from about $1.5 billion this year. And earnings per share could climb to as much as $3.65 from about 90 cents this year.
"I believe we can hit those numbers," Arlotta said.