What will it mean to RP share holders now that RP has acquired RPR?
RP shareholders are experiencing a transformation of their company from a diversified pharmaceuticals/chemicals/fibers to a purely pharmaceuticals holding. The acquisition gives RP the remaining ~50% of RPR that it didn't already own.Management has outlined its plans, already being implemented, to concentrate on the higher margin pharmaceuticals business and, in the process, spin off its low margins chemicals and fibers business. The spin off will take place piece-meal, with a partial offering in the first half of '98. As these business segments improve, the remainder will be spun off at a higher price.In two years time, RP will be entirely a pharmaceuticals firm, and a premier one at that. Consequently, shareholders can expect higher margins and returns on equity.
Does this mean that RP and RPR will eventally merge into one? Be gentle I'm new at this.
I believe that the merger is definate. One analyst has estimated price of RP to go up dramatically in next year due to additional market coverage that the merger will bring Rhone Polenc. This is an axcellent stock. Hold it long term.
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