National Intergroup Announces Leadership, Strategy Changes
PITTSBURGH (AP) _ National Intergroup Inc. has decided to keep FoxMeyer Drug Co., the nation’s third-largest drug distributor, and make it the holding company’s core subsidiary.
National Intergroup also said Thursday the co-principals of its largest shareholder group, Centaur Partners of New York, have been named co-chairmen of the company and that it has appointed a new board of directors that gives the group a majority of the seats.
The new board decided to explore a tax-free distribution of all or a substantial portion of shares of its Ben Franklin unit to the company’s shareholders to create an independent, publicly traded company.
The company had considered selling Ben Franklin, a franchiser and wholesaler for variety and craft stores, as well as a craft retailer.
The board said it has received several offers for Permian Partners, its crude oil distribution company, and is talking to bidders.
The new board decided at its first meeting Wednesday to keep FoxMeyer.
″FoxMeyer has effected a significant turnaround in the last year,″ said the co-chairmen, Abbey J. Butler and Melvyn J. Estrin.
″While we received several bids for this business, they did not reflect the operating potential of the company or the significant positive developments taking place in FoxMeyer’s markets and industry.″
FoxMeyer’s net sales for its most recent quarter ended Dec. 31 increased 21 percent to $733.6 million from $605.3 million in the same period a year earlier.
Centaur won three board seats July 25 in a proxy fight at the company’s annual meeting.
The dissident group, National Intergroup’s largest shareholder with about 19 percent of outstanding shares, had wanted the company to sell FoxMeyer and distribute the proceeds from its assets to shareholders.
But Estrin said ″an extraordinary improvement″ in FoxMeyer’s profit margin led to the change.
As part of the change, National Intergroup’s administrative and corporate officers will be moved and merged into FoxMeyer’s existing headquarters in Carrollton, Texas.
Butler and Estrin succeed Buck Mickel, who was named chairman in August.
Robert L. King, president and chief executive officer of FoxMeyer, was named president and chief executive officer of National Intergroup. He succeeds James S. Pasman as president and Howard M. Love as chief executive. Both have retired as planned.
The company said it reduced the size of the board from 12 to nine members. It announced the appointment of four new directors, saying the incumbents had resigned.