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Shearson Lehman Hutton Unit Agrees To Acquire Scherer

May 2, 1989

DETROIT (AP) _ A Shearson Lehman Hutton Holdings Inc. unit agreed to acquire gelatin capsule manufacturer R.P. Scherer Corp. in an offer worth nearly $407 million, the companies announced.

RPS Acquisition Corp., formed by Shearson Lehman Hutton Holdings and its Merchant Banking Partnerships, will commence a $31.75-a-share tender offer for Scherer stock on Friday, Shearson spokesman Steve Faigen said Monday.

The tender offer would total $352 million and RPS would assume debt totaling $54.9 million, for a $406.9 million total, Faigen said.

Scherer would become a privately held company, with interests held by entities including Shearson Lehman Hutton Holdings and its Management Banking Partnerships, Faigen said.

Scherer opened several purchase offers last Wednesday, then began negotiations that led to the RPS transaction, Scherer spokeswoman Jayne Colombo said. She didn’t identify other bidders or say how many there were but said the capsule maker didn’t expect further offers.

Scherer stock closed Friday at $33.37 1/2 a share. The company asked the National Association of Securities Dealers not to permit over-the-counter trading in its stock Monday because of the impending announcement, Colombo said.

Scherer decided in September to consider offers after a dispute between former president Peter Fink, who opposed selling, and his estranged wife Karla Scherer Fink, a board member and daughter of the company founder.

Karla Fink’s pro-sale forces prevailed in a proxy fight and Peter Fink left, forming another company, Quantum Corp. of St. Clair Shores. Fink, who said he might try to buy Scherer, didn’t return a telephone call Monday.

Scherer has about 4,400 employees in 22 facilities in 13 countries. It reported sales of $290.7 million in its fiscal year ended March 31, 1988.

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