Richardson-Vicks Inc. stock soared 10 points today amid Wall Street rumors that the consumer products company best known for Vap-O-Rub and Oil of Olay is about to be sold to either Procter & Gamble Co. or Pfizer Inc.
Vicks' closing price of 63 1/2 was above the latest hostile takeover bid of $60 a share from Unilever U.S. Inc., an indication that the market believes a merger with a third party, at a higher price, is about to be announced, analysts said today. Since the company's takeover fight with Unilever began several weeks ago, the stock has moved "correctly" prior to some announcements, indicating that certain investors are acting on reliable inside information, analysts said.
At the current price, it would take more than $1 billion to acquire the Wilton, Conn., company.
Vicks was the most active stock on the Big Board yesterday, with more than 3 million shares traded.
Until today, Vicks answered telephone calls from financial reporters and Wall Street analysts by insisting that the company was vigorously opposed to being acquired by Unilever and was not interested in being acquired by third parties who could act as "white knights," or friendly suitors. But today, Vicks declined to respond to several telephone calls from The Washington Post and some Wall Street analysts who said they previously had daily conversations with company officials.
"The market has made a statement that there is a white knight and there is going to be a deal," said Bear, Stearns analyst James Waggoner. "I think it is a question of structuring the terms of the deal."
"There has been smart money in this stock; somebody knows a white knight is going to surface with a higher bid and it is possibly Procter & Gamble," said Wertheim & Co. analyst Emma W. Hill. "P&G has been looking for an acquisition in the ethical and proprietary drug area. Pfizer is another name I have heard. "People know things in this stock," Hill said. "Before an announcement, the stock reacts the way it should."
Bristol-Myers Co. also was mentioned as a possible suitor.
Vicks, which had sales of $1.2 billion and net income of $72.2 million, is controlled by members of the Richardson family, who own more than a third of the company's shares. Since the company's charter requires holders of two-thirds of its shares to approve any takeover, the family has the power to block Unilever's hostile bid.
However, since millions of shares are in trusts and held by public shareholders outside the Richardson family, the company may be forced to sell to the highest bidder to avoid stockholder suits.
Two events led to today's activity in Vicks stock. First, Unilever said it would pay $60 a share for the company if the Vicks board approved the deal and only $48 a share if the board opposed it, a move designed to force the company to sell. Second, a Delaware judge granted a preliminary injunction Friday preventing Vicks from issuing a new series of preferred stock designed to block Unilever's takeover bid.