Since Bristol-Myers Squibb Co. announced a strategic review for its Mead Johnson division, maker of infant formula Enfamil and other products, there's been speculation -- some of it here -- about who might buy the unit.
Thursday, along with its quarterly results, the restructuring company
announced the following:
Bristol-Myers Squibb currently plans to file a registration statement by year-end to sell approximately 10 percent and no more than 20 percent of Mead Johnson Nutritionals to the public through an initial public offering and to retain at least an 80% equity interest in Mead Johnson Nutritionals as part of the overall business portfolio for the foreseeable future. After extensively considering strategic options, management believes this plan will allow Mead Johnson Nutritionals to implement its growth plans, increase shareholder value, and maintain its important financial contribution to Bristol-Myers Squibb. The execution of the plan is dependent upon and subject to a number of factors and uncertainties including business and market conditions.
The most interesting detail is the part about MJ's growth plans. There are several logical strategic buyers for MJ -- for example, Nestle SA, whose possible interest we
recently highlighted when the food giant (and owner of Gerber) announced the sale of its Alcon eye-care business to Novartis AG. Another might be Groupe Danone SA, to whom Jean-Marc Huet sold Royal Numico NV, a maker of baby food and nutritional products, in July, before
becoming CFO at BMS last month. Perhaps the "growth plans" indicate a difference of opinion about the growth potential of the business between BMS and potential buyers like these.
And, apologies for splitting hairs, but the phrase "currently plans" (as opposed to just "plans") is intriguing too. It's not at all unusual, of course, for a company disposing of a business to pursue parallel paths, for example playing off a sale to a strategic or a PE firm (not in the cards here, of course, thanks to the credit crunch) against an IPO. Managing the parallel workstreams involved for the different scenarios is a bit of a challenge, but numerous companies have done it; we even ran an article in Corporate Dealmaker (called "Keep 'Em Guessing") on
how they go about it.
Is BMS keeping them guessing? We have no way of knowing, of course. But it would seem the smart thing to do, wouldn't it? -
Kenneth Klee
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