P. LEINER NUTRITIONAL PRODUCTS CORP. ANNOUNCES DECISIONS REGARDING BOOKER PLC SHAREHOLDING
P. LEINER NUTRITIONAL PRODUCTS CORP. ANNOUNCES
DECISIONS REGARDING BOOKER PLC SHAREHOLDING
TORRANCE, Calif., Nov. 4 /PRNewswire/ -- P. Leiner Nutritional Products Corp. (AMEX: PLI) announced today that its board of directors has decided not to exercise the company's contractual right of first purchase with respect to the shares of its stock owned by its majority shareholder, Booker plc. However, the board has decided to commence discussions with Booker regarding the possibility of the company purchasing Booker's position at a negotiated price.
Among the reasons cited by the board for its decision not to exercise were the substantial debt load that the company would incur, and the capital dilution to other shareholders, if it were to use the expensive bridge financing sources necessary to enable it to exercise the right at the formula price within the short time periods permitted by the agreement with Booker. In connection with its decision to pursue a possible negotiated purchase of Booker's position, the board of directors has instructed its financial advisor, Dean Witter Reynolds Inc., to seek financing for such a transaction and a strategic equity investor for the company.
Booker notified the company on Oct. 4, 1991, of its intention to dispose of its 60 percent shareholding in the company. The company's agreement with Booker allowed the company until Nov. 4 to exercise its right to purchase the shares at a formula price. Under the agreement, the purchase was required to close on, or before, Nov. 18.
The decision by the board today allows Booker a period of 120 days within which to sell its shares in the company to one, or more, third parties at, or above, the final formula price of $13.425 per share. Booker has engaged S.G. Warburg & Co. Inc. as its investment banker for this purpose. If Booker sells shares to a purchaser that would become the majority shareholder of P. Leiner, that purchaser must undertake to commence, within 30 days of its purchase from Booker, a cash tender offer for all outstanding shares of the company at the highest price per share paid to Booker.
Michael Leiner, chairman and chief executive officer, commented: "Our board and a special committee of the independent directors, together with our legal and financial advisors, have made a very thorough evaluation of alternatives, and we have taken great care in order to reach a decision which is in the best interests of our shareholders. The same principles will guide our analysis and decisions with respect to a possible negotiated purchase of Booker's shares.
"This ongoing corporate matter will not distract management from its prime focus on the continued development and growth of P. Leiner Nutritional Products. We remain committed to providing our customers with the highest levels of quality and service."
P. Leiner Nutritional Products Corp. is a leading U.S. manufacturer of vitamins and other health and beauty aid products with sales of $140 million per year. The company's customers include 21 of the nation's 25 largest drugstore chains, 21 of the 25 largest supermarket chains, and 15 of the 25 largest discount chains. P. Leiner was recently included in the Forbes list of the 200 Best Small Companies in America.
/CONTACT: Michael Leiner, CEO of P. Leiner Nutritional Products Corp., 310-328-9610/
(PLI) CO: P. Leiner Nutritional Products Corp., Booker plc. ST: California IN: SU: SE -- LA024 -- 0994 11/04/91 21:19 EST