Searle Decides to Remain Independent

G. D. Searle & Co., maker of the popular NutraSweet sugar substitute, said Monday that it had ended its search for a possible buyer of all or part of the company and would remain independent.

The Skokie, Ill.-based pharmaceutical company announced last September that it was exploring a sale at the request of the Searle family, which wanted to diversify its 34% stake. Among the firms that expressed interest in Searle were Pfizer Inc., Monsanto and Angus Chemical Co., an affiliate of San Francisco-based Pacific Gas & Electric.

Searle said its board unanimously agreed that the company should remain independent after studying various alternatives, including a number of unidentified proposals to buy the company’s businesses. The company released a letter from Daniel Searle, Suzanne Searle Dixon and William Searle in which they supported the board’s decision.

However, Searle stock plummeted in response to the news, closing at $48.75 a share, down $8, on volume of 2.5 million shares on the New York Stock Exchange. The stock was the biggest percentage loser of the day and the fourth most active.

Michael A. Martorelli, an analyst with Janney Montgomery Scott Inc. in Philadelphia, said: “I still think the reason for (a sale) falling apart is that they couldn’t get the deal they wanted. They couldn’t get the value from NutraSweet that they thought was there.” He agreed with David Saks at Morgan, Olmstead, Kennedy & Gardner in New York, who said: “I don’t think the statement that they have withdrawn is permanent.”

Donald Rumsfeld, Searle’s president and chief executive, said in a statement that the decision was based on “the fundamental confidence we have in the future of the company.”

He cited the recent decisions by major soft-drink makers to switch to using entirely NutraSweet in their diet beverages, the start-up of a $130-million NutraSweet manufacturing facility and Searle’s plans to launch its new Cytotec anti-ulcer drug in Mexico.

Meanwhile, Searle, which had $1.2 billion in 1984 sales, said it increased its quarterly cash dividend to 25 cents from 13 cents, payable June 5 to shareholders of record May 13.