J&J starts Mentor offer, gets Israeli OK for Omrix

NEW BRUNSWICK - Health care products company Johnson & Johnson said today that it will start its tender offer to purchase all outstanding shares of common stock for Mentor Corp. in a $1.07 billion deal the conglomerate announced earlier this month.

And in an unrelated matter, the Israeli government has approved J&J's planned acquisition of business partner Omrix Biopharmaceuticals Inc., a move to boost the health products giant's surgical care business.

J&J said it will file terms of the Mentor offer with the Securities and Exchange Commission. Cosmetic-product and breast-implant maker Mentor will file a statement that includes a board recommendation that shareholders accept the offer.

J&J said Dec. 1 it would start a cash tender offer for $31 per share, which is nearly double Mentor's Nov. 28 closing price of $16.15.

Santa Barbara, Calif.-based Mentor makes MemoryGel breast implants, liposuction equipment and "barrier" skin repair products. Mentor will operate as a stand-alone under J&J's Ethicon Inc. business, which provides sutures, mesh and other surgical products.

J&J will start the offer through a new wholly owned subsidiary, Maple Merger Sub Inc. Its closing is conditioned on the tender of a majority of the outstanding common stock shares on a fully diluted basis, among other conditions. Unless extended, the offer will expire at midnight Jan. 12.

J&J shares fell 89 cents to $57.38 in morning trading, while Mentor's stock dropped 3 cents to $30.63.

Regarding the Omrix acquisition, J&J said late Thursday that it had received notification of the approval from the Israeli general director of the Antitrust Authority. The notification, dated Wednesday, was one of the conditions of Johnson & Johnson's cash tender offer, which is to expire at midnight on Dec. 23.

Johnson & Johnson is offering $25 per share for Omrix, an 18 percent premium over its $21.16 price right before the Nov. 24 announcement of the $438 million deal.

Omrix, which sells products including liquid sealants to control bleeding during surgery, has a five-year-old partnership with J&J's Ethicon surgical products unit for development and distribution of Omrix products.

Omrix is headquartered in New York but has its research and manufacturing operations in Tel Aviv.

Boards of directors of both companies have approved the deal, and Omrix founder and chief executive Robert Taub has agreed to tender 16 percent of the outstanding shares.

Besides J&J getting a majority of outstanding shares, the deal requires customary closing conditions and approval by the Investment Center of Israel.

Omri shares were up 2 cents late this morning, to $24.86, in Nasdaq trading.