Carter-Wallace Mulls Split, Sales

Pharmaceutical and consumer products maker Carter-Wallace Inc. is in advanced talks to split the company and sell its two main businesses in separate deals that would value the company, after taxes, at just over $20 a share, or $920 million, the Wall Street Journal reported in its online edition on Thursday.

The report said Church & Dwight Co., owner of Arm & Hammer brand, and buyout firm Kelso & Co. have teamed up to bid about $735 million on the consumer business.

At the same time, a consortium of equity firms Carlyle Group and Cypress Group in conjunction with former executives of Warner-Lambert Co., are bidding about $420 million for the pharmaceuticals and diagnostic business, the paper said.

Shares of Carter-Wallace closed up $1 at $24.45 on Wednesday, off a 52-week high of $34.44, up from a year low of $17.88. The two offers will total about $1.2 billion, but because Carter-Wallace is selling the company in pieces it will face a large corporate tax bill.

Talks are at a delicate stage and could easily fall apart, the report said, and other bidders could emerge to derail the deals. Already, investor Mario Gabelli is emerging as a potential problem, the paper noted. Gabelli said Wednesday he wants the company to buy back 10 million shares, go private in a management buyout and then split into two companies to prepare for a future sale, and he is considering hiring an investment bank to analyze his plan, the paper said.