<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-9/A
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D) (4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
----------------
RHONE-POULENC RORER INC.
(NAME OF SUBJECT COMPANY)
RHONE-POULENC RORER INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS OF SECURITIES)
----------------
76242T 10 4
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
RICHARD T. COLLIER, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
RHONE-POULENC RORER INC.
500 ARCOLA ROAD
COLLEGEVILLE, PENNSYLVANIA 19426
(610) 454-8000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATION ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPY TO:
MARGARET L. WOLFF, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
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- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated August 22, 1997 (the "Schedule 14D-9"), of
Rhone-Poulenc Rorer Inc., a Pennsylvania corporation (the "Company" or "RPR"),
filed in connection with the Offer to Purchase as set forth in the Schedule
14D-9. Capitalized terms used herein shall have the definitions set forth in
the Schedule 14D-9 unless otherwise provided herein.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The response to Item 8 is hereby amended and supplemented by adding the
following:
The complaint in Steiner v. Rhone-Poulenc S.A. has been amended to include
the Company and its directors as defendants (the "First Amended Complaint").
In the First Amended Complaint, plaintiffs now also allege, among other
things, that the directors of the Company acted wrongfully in preventing them
from realizing the full value of their investment in the Company. A copy of
the First Amended Complaint is attached hereto as Exhibit (c)(16) and is
incorporated by reference herein in its entirety.
On August 25, 1997, an additional putative class action was filed by a
shareholder of the Company. In Columbo v. Rhone-Poulenc Rorer Inc. et al.
(Pennsylvania Court of Common Pleas, Trial Division, Montgomery County, filed
August 25, 1997) (the "Columbo Complaint"), plaintiff alleges that the
defendants--Purchaser and several individuals who are officers and/or
directors of the Company and/or Purchaser--have breached their fiduciary
duties by using positions of power and control to impose an allegedly
inadequate price per share on the minority shareholders. The relief sought
includes a declaration that defendants have breached their fiduciary duties,
an injunction against the Offer or, in the alternative, rescission of the
contemplated transaction and damages. A copy of the Columbo Complaint is
attached hereto as Exhibit (c)(17) and is incorporated by reference herein in
its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
The response to Item 9 is hereby amended and supplemented by adding the
following:
EXHIBIT NO.
(a)(13) Communications Package to Holders of Company Stock Options
(incorporated by reference to Exhibit (a)(11) to Amendment No. 1 to
Purchaser's Tender Offer Statement on Schedule 14D-1, dated September
9, 1997).
(c)(16) First Amended Complaint filed in Steiner v. Rhone-Poulenc Rorer Inc.
et al. (United States District Court for the Eastern District of
Pennsylvania, filed August 20, 1997).+
(c)(17) Complaint in Columbo v. Rhone-Poulenc Rorer Inc. et al. (Pennsylvania
Court of Common Pleas, Trial Division, Montgomery County, filed August
25, 1997).+
- --------
+ Filed herewith.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Rhone-Poulenc Rorer Inc.
By: /s/ Michel de Rosen
--------------------
Name: Michel de Rosen
Title:Chairman and Chief
Executive Officer
Dated: September 9, 1997
2
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
(a)(13) Communications Package to Holders of Company Stock Options
(incorporated by reference to Exhibit (a)(11) to Amendment No. 1 to
Purchaser's Tender Offer Statement on Schedule 14D-1, dated September
9, 1997).
(c)(16) First Amended Complaint filed in Steiner v. Rhone-Poulenc Rorer Inc.
et al. (United States District Court for the Eastern District of
Pennsylvania, filed August 20, 1997).+
(c)(17) Complaint in Columbo v. Rhone-Poulenc Rorer Inc. et al. (Pennsylvania
Court of Common Pleas, Trial Division, Montgomery County, filed August
25, 1997).+
- --------
+ Filed herewith.
<PAGE>
Exhibit (c)(16)
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
<TABLE>
- ---------------------------------------
<S> <C>
KENNETH STEINER,
CIVIL ACTION NO.
Plaintiff, 97-4605 (WHY)
- against - PLAINTIFF'S FIRST AMENDED
COMPLAINT FOR EQUITABLE
RHONE-POULENC RORER INC., MICHEL AND DECLARATORY RELIEF
DEROSEN, TIMOTHY G. ROTHWELL, -------------------------
MANFRED E. KAROBATH, JEAN-MARC
BRUEL, CHARLES HENRI FILIPPI,
JAMES S. RIEPE, ERIC J. TOPOL,
ROBERT E. CAWTHORN, CLAUDE HELENE,
JEAN JACQUES BERTRAND, DALE F.
FREY, IGOR LANDAU, JEAN PIERRE
TIROUFLET, and RHONE-POULENC S.A.,
Defendants.
- ---------------------------------------
</TABLE>
Plaintiff, by his attorneys, alleges upon personal knowledge as to himself
and his own acts, and upon information and belief as to all other matters based
upon the investigation conducted by and through his attorneys which included,
among other things, a review of the filings by Rhone-Poulenc Rorer Inc. ("Rorer"
or the "Company") and Rhone-Poulenc S.A. ("Rhone-Poulenc") with the Securities
and Exchange Commission, news wire services, news releases, and other publicly
disseminated filings and materials, as follows:
JURISDICTION AND VENUE
----------------------
1. This action is brought to remedy violations of Sections 14(d) and
14(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
15 U.S.C. (S)(S) 78n(d) and 78n(e).
<PAGE>
2. The subject matter jurisdiction of this Court is based upon, Section 27
of the Exchange Act, 15 U.S.C. (S)78aa.
3. Venue is properly laid in the Eastern District of Pennsylvania, because
many of the acts, transactions, and conduct constituting violations of law
complained of herein, including, inter alia, communications to Rorer, the target
----- ----
of an improper tender offer by Rhone-Poulenc, have occurred in this District.
4. In connection with the acts, conduct, and other wrongs complained of
herein, defendants, directly and indirectly, used the means and
instrumentalities of interstate commerce, including the mails and the facilities
of national securities markets, i.e., the facilities of the New York Stock
----
Exchange ("NYSE").
THE PARTIES
-----------
5. Plaintiff Kenneth Steiner, at all relevant times, has been the owner
of common stock of Rorer.
6. Rorer is a corporation duly organized and existing under the laws of the
State of pennsylvania and which maintains its principal executive offices at 500
Arcola Road, Collegeville, Pennsylvania 19242. Rorer is primarily engaged in
the development, manufacturer, and marketing of a line of pharmaceutical
products, including prescription drugs, over-the-counter medicines and
plasma-derived products. Rorer is a majority-owned subsidiary of Rhone-Poulenc.
Rorer has approximately 136.8 million shares of common stock outstanding, of
which approximately 68.3% are owned by Rhone-Poulenc. The remaining
approximately 43 million shares are
2
<PAGE>
held by at least several hundred public shareholders of record other than
defendants. Rorer's stock is publicly traded on the NYSE.
7. Michel DeRosen, at all times material hereto, has been Chairman of the
Board and Chief Executive Officer of Rorer.
8. Timothy G. Rothwell, at all times material hereto, has been President
and a Director of Rorer.
9. Manfred E. Karobath, at all times material hereto, has been Executive
Vice President and a Director of Rorer.
10. Jean-Marc Bruel, at all times material hereto, has been Vice-Chairman
of the Rorer's Board of Directors.
11. Charles Henri Filippi, James S. Riepe, Eric J. Topol, Robert E.
Cawthorn, Claude Helene, Jean Jacques Bertrand, Dale F. Frey, Igor Landau, and
Jean Pierre Tirouflet, at all times material hereto, were directors of Rorer.
12. The defendants named in paragraphs 7 through 11 are hereinafter
referred to as the "Individual Defendants."
13. The Individual Defendants hold their positions at Rorer soley at the
pleasure of defendant Rhone-Poulenc.
14. Defendant Rhone-Poulenc is a corporation duly organized and existing
under the laws of France and maintains its principal place of business at 25
Quai Paul Doumer, 92408 Courbevois Cedex, France. Rhone-Poulenc's American
depository receipts ("ADR's") trade on the NYSE. Rhone-Poulenc researches,
develops, produces, markets, and sells human and animal pharmaceuticals and is
engaged in the chemical, fiber, and polymer
3
<PAGE>
business. Rhone-Poulenc presently owns or controls approximately 68.3% of the
outstanding stock of Rorer.
FACTS
-----
15. On June 26, 1997, Rhone-Poulenc announced it was considering an offer
(the "Original Offer") to acquire all of the shares of Rorer it does not already
own in a cash transaction whereby Rhone-Poulenc would pay $92.00 cash for each
publicly-held share of Rorer.
16. Rhone-Poulenc announced the Original Offer during the period when a
so-called "standstill agreement" precluded it from acquiring all of the publicly
traded shares of Rorer. The restriction under the "standstill agreement," dating
from a 1990 merger with Rorer Inc. that created the current structure of Rorer,
was set to expire on July 31, 1997.
17. Because of its position of dominance and control of Rorer,
Rhone-Poulenc announced the Offer on June 26, 1997 to manipulate the price of
Rorer shares so that they do not trade at a price materially higher than the
Original Offer, thereby limiting the price it will have to pay for the balance
of Rorer's stock.
18. By announcing the Original Offer on June 26, 1997, Rhone-Poulenc began
the tender offer process without complying with the requirements of the Exchange
Act and the rules promulgated thereunder, attempted to limit the Original Offer
price, and avoided having to make a materially higher offer were Rorer's stock,
unaffected by the Original Offer, to rise materially between now and July 31,
1997.
4
<PAGE>
19. On July 8, 1997, when the price of Rorer shares rose to $93.625,
$1.625 above the Original Offer price, Jean-Rene Fourtou, Chairman and Chief
Executive Officer of Rhone-Poulenc, stated in an interview with Bloomberg
Information Television:
"The share price of [Rorer] is slightly above our offer price, which
---------------
clearly poses a problem . . . .
"We are going to move as quickly as possible . . . . Fast, if we reach
a rapid accord with the minority shareholders and their representatives on
the board -- which I hope will happen -- a little more slowly otherwise.
As of August 1 we'll be ready to move quickly." [Emphasis added].
20. On August 20, 1997, Rorer reported that it had agreed to accept a
revised offer from Rhone-Poulenc to acquire the outstanding minority interest in
Rorer for $97.00 per share in cash (the "Revised Offer"). It was widely reported
in the financial press that Rhone-Poulenc was forced to raise its initial bid
for Rorer after complaints from Rorer shareholders that the Original Offer
undervalued Rorer's earnings potential.
21. Rhone-Poulenc's Revised Offer was conditional upon it acquiring at
least 90% of Rorer's stock -- of which Rhone-Poulenc already holds 68% percent.
22. Rhone-Poulenc announced that in order to implement the Revised Offer,
it would commence a tender offer at $97.00 per share within the next five days
and would thereafter make a second offer at $97.00 per share for those shares it
does not acquire in the tender offer.
5
<PAGE>
23. Despite the increase over its initial bid, Rorer and the Individual
Defendants have wrongfully agreed to the terms of the Revised Offer which are
grossly unfair, inadequate, and provides value to Rorer's stockholders
substantially below the fair or inherent value of the Company. The intrinsic
value of the equity of Rorer is materially greater than the consideration
contemplated by Rhone-Poulenc's proposed offer price, taking into account
Rorer's earnings potential, asset value, liquidation value, expected growth,
revenues, and cash flow. The Revised Offer remains below the expectations of
market analysts who expected an offer price of $105.00 or more per share.
24. The Revised Offer and offered premium is wrong, unfair, harmful to
Rorer's public stockholders and wholly inadequate in light of the fact that
public shareholders will no longer share proportionately in the true value of
Rorer's valuable assets, profitable business, and that the same value will be
usurped for the benefit of Rhone-Poulenc -- the majority owner of the Company's
stock.
25. Rhone-Poulenc is presently the largest shareholder of Rorer, and now
seeks to take advantage of its majority stock ownership position in Rorer by
imposing the inadequate Revised Offer on Rorer's public stockholders. The
Revised Offer is part of a sweeping corporate overhaul of Rhone-Poulenc, meant
to benefit only Rhone-Poulenc. Pursuant to the planned overhaul, Rhone-Poulenc
intends to spin off its chemical, fibers, and polymer operations, in order to
become one of the world's biggest
6
<PAGE>
pharmaceutical companies, by combining Rorer's business with Rhone-Poulenc's
vaccine and animal health businesses. According to The Wall Street Journal of
-----------------------
June 27, 1997, the chemical business has been less profitable than the
pharmaceutical business and has weighed down Rhone-Poulenc's profits and price
share. Thus, Rhone-Poulenc's plan is to divest itself of its less profitable
businesses and, taking advantage of its dominant position over Rorer, acquire
from the public shareholders of Rorer, without complying with the requirements
of the Exchange Act, Rorer's more profitable pharmaceutical business.
26. Following the announcement of the Revised Offer, shareholders of Rorer
who do not possess crucial material information regarding their decisions
whether to hold or sell their shares of Rorer and who are, otherwise poorly
informed as a result of defendants' incomplete or non-existent disclosures, are
required to make their decisions without the requisite disclosures being made by
Rorer and Rhone-Poulenc.
IRREPARABLE INJURY
------------------
27. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief preventing defendants from inequitably and unlawfully
depriving Rorer and its shareholders of their right to realize a full and fair
value for Rorer's stock and to compel defendants to maximize Company and
shareholder value.
28. Only through the exercise of this Court's equitable powers can the
Company and its shareholders be fully protected from the immediate and
irreparable injury that defendants' actions
7
<PAGE>
threaten to inflict. Defendants are precluding the shareholders' enjoyment of
the full economic value of their investment by acquiescing the Rhone-Poulenc
offer which offers an inadequate premium in light of Rorer's earnings potential
and assets.
29. Unless enjoined by the Court, defendants will bend to the will of
Rhone-Poulenc and sell Rorer at an insubstantial premium, all to the irreparable
harm of Rorer and its public shareholders.
30. Rorer and its public shareholders have no adequate remedy at law.
COUNT I
-------
(Individual Claim for Injunctive Relief)
31. Plaintiff repeats and realleges all prior paragraphs, as though full
set forth herein.
32. Each Individual Defendant is beholden to Rhone-Poulenc for his position
with Rorer and is acting solely for the benefit of Rhone-Poulenc in agreeing to
sell Rorer to Rhone-Poulenc on the terms set forth in paragraph 20 herein.
33. Defendants have wrongfully failed to take those actions necessary to
maximize shareholder value in selling Rorer to Rhone-Poulenc. These wrongful
actions have prevented shareholders from realizing the full value of their
investment in Rorer. As a result of the foregoing, defendants have agreed to
sell Rorer to Rhone-Poulenc at a price which is wholly inadequate to the public
shareholders of Rorer, which benefits solely Rhone-Poulenc and
8
<PAGE>
which puts the interests of Rhone-Poulenc at odds with and above the interests
of the public shareholders of Rorer, all to the detriment of the public
shareholders of Rorer.
34. Defendants' conduct was not due to an honest error or misjudgment, but
rather was due to the defendants' wrongful actions in putting the interests of
Rhone-Poulenc above the interests of Rorer's public shareholders.
35. Rorer's shareholders have sustained and will continue to sustain injury
by reason of the defendants' wrongful conduct.
36. Unless enjoined by this Court, defendants will continue to act
wrongfully, and will succeed in their plan to exclude plaintiff from the fair
proportionate share of Rorer's valuable assets and businesses, all to
plaintiff's irreparable harm.
37. Plaintiff has no adequate remedy of law.
COUNT II
--------
(Against The Individual Defendants
For Declaratory Relief)
38. Plaintiff repeats and realleges all prior paragraphs, as though fully
set forth herein.
39. The Individual Defendants have acted wrongfully and to the detriment
and harm of plaintiff and the other public shareholders of Rorer by preventing
Rorer's public shareholders from realizing the full value of their investment in
Rorer, all for the benefit of Rhone-Poulenc.
9
<PAGE>
40. Plaintiff requests a declaration that, the Individual Defendants have
acted wrongfully, and are continuing to act wrongfully by failing to take those
actions necessary to maximize shareholder value.
COUNT III
---------
(Violation of Sections 14(d)
and 14(e) of the Exchange Act Against All Defendants)
41. Plaintiff repeats and realleges the preceding paragraphs of this
Complaint as though fully set forth herein.
42. This claim, pursuant to Sections 14(d) and 14(e) of the Exchange Act,
is being brought by plaintiff against all defendants to enjoin the Offer, which
is an improper tender offer, commenced by defendants.
43. In preparing, publishing and disseminating the offers, and subsequently
commenting publicly on the offers, defendants knowingly or recklessly commenced
and continued an improper tender offer in violation of Sections 14(d) and 14(e)
of the Exchange Act.
44. By reason of the foregoing, defendants violated Sections 14(d) and
14(e) of the Exchange Act and defendants should be preliminary and permanently
enjoined from continuing the offers, together with such other and further relief
as may be proper.
WHEREFORE, plaintiff demands judgement as follows:
a. Declaring that the Individual Defendants, and each of them, have
acted wrongfully toward plaintiff and Rorer's
10
<PAGE>
other public shareholders, and awarding compensatory damages in an amount to be
proved at trial;
C. Declaring that the defendants, and each of them, have acted
wrongfully toward plaintiff and the other public shareholders of Rorer, and
requiring defendants to take all steps necessary to maximize shareholder value.
E. Declaring that the defendants and each of them have violated Sections
14(d) and 14(e) of the Exchange Act and granting temporary, preliminary and
permanent injunctive relief.
F. Awarding plaintiff the costs of his action, including reasonable
attorneys' and accountants' and other experts' fees and other disbursements; and
G. Granting such other and further relief as the Court may deem just and
proper.
Dated: August 20, 1997
SAVETT, FRUTKIN, PODELL & RYAN, P.C.
By: /s/ Robert P. Frutkin
---------------------------------
Robert P. Frutkin
320 Walnut Street, Suite 508
Philadelphia, PA 19106
(215) 923-5400
WECHSLER HARWOOD HALEBIAN
& FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
Attorneys for Plaintiff
11
<PAGE>
CERTIFICATE OF SERVICE
----------------------
The undersigned hereby certifies that he has this date caused the foregoing
Plaintiff's First Amended Complaint for Equitable and Declaratory Relief to be
served by first class mail upon counsel for defendant, Rhone-Poulenc:
Jay A. Dubow, Esquire
Wolf, Block, Schorr and Solis-Cohen
12th Floor Packard Building
15th and Chestnut Streets
Philadelphia, PA 19102-2678
Dated: August 20, 1997 /s/ Robert P. Frutkin
--------------------------------
ROBERT P. FRUTKIN
<PAGE>
Exhibit (c)(17)
<PAGE>
[STAMP OF OFFICE OF THE
PROTHONOTARY MONTGOMERY
COUNTY, PA 97 AUG 25 PM
2:14 APPEARS HERE]
--------------------------
By: Anthony Chu
--------------------------
Attorney I.D. 79645
-----------------
--------------------------
-------------------------- Attorney for Plaintiff
---------------------
IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
Patrick F. Columbo *
- --------------------------------
*
- -------------------------------- CLASS ACTION
v. * No. 97 15704
--------------
Rhone-Poulenc Rorer, Inc. *
- --------------------------------
et al. *
- --------------------------------
NOTICE
You have been sued in court. If you wish to defend against the claims set
forth in the following pages, you must take action within twenty (20) days after
this Complaint and notice are served, by entering a written appearance
personally or by attorney and filing in writing with the court your defenses or
objections to the claims set forth against you. You are warned that if you fail
to do so the case may proceed without you and a judgment may be entered against
you by the court without further notice for any money claimed in the Complaint
or for any other claim or relief requested by the plaintiff. You may lose money
or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A
LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO
FIND OUT WHERE YOU CAN GET LEGAL HELP.
Lawyer Reference Service
100 West Airy Street
Norristown, Pennsylvania 19401
Telephone (610) 279-9660
[STAMP OF LEGAL DEPT.
RECEIVED AUG 26, 1997
APPEARS HERE]
[STAMP OF RECEIVED
MONTGOMERY COUNTY
SHERIFFS DEPT.
97 AUG 25 PM 2:39
APPEARS HERE]
<PAGE>
SPECTOR & ROSEMAN, P.C.
BY: Robert M. Roseman
I.D. No.: 37989
BY: Anthony Chu
I.D. No.: 79645
2000 Market Street, 12th Floor
Philadelphia, PA 19103
(215) 864-2400
IN THE COURT OF COMMON PLEAS
OF MONTGOMERY COUNTY PENNSYLVANIA
- --------------------------------------X
PATRICK F. COLUMBO, :
:
Plaintiff, :
: CLASS ACTION COMPLAINT
v. : ----------------------
:
RHONE-POULENC RORER, INC., : CIVIL ACTION - LAW
RHONE-POULENC S.A., JEAN-MARC :
BRUEL, CHARLES-HENRI FILIPPI, : NO. 97-15704
E. MANFRED KAROBATH, JAMES S. :
RIEPE, ERIC I. TOPOL, M.D., : JURY TRIAL DEMANDED
ROBERT E. CAWTHORN, CLAUDE :
HELENE, JEAN-JAQUES BERTRAND, :
MICHEL DE ROSEN, DALE F. FREY, :
IGOR LANDAU, TIMOTHY ROTHWELL :
and JEAN-PIERRE TIROUFLET :
:
Defendants. :
- --------------------------------------X
Plaintiff, by his attorneys, for his Complaint alleges, upon information
and belief, except as to the allegations contained in paragraph 2, which
plaintiff alleges upon knowledge, as follows:
<PAGE>
NATURE OF ACTION
----------------
1. Plaintiff brings this class action on behalf of himself and all
other shareholders of defendant Rhone-Poulenc Rorer, Inc. ("Rorer" or the
"Company") similarly situated (the "Class") to enjoin defendants from
effectuating an unfair cash-out acquisition be Rhone-Poulenc S.A.
("Rhone-Poulenc"), designed to force the sale of minority shareholders' equity
interest in Rorer at a grossly inadequate and unfair price of $97 per share. As
set forth below, pursuant to the proposed tender offer, Rhone-Poulenc, which now
controls approximately 68% of the Company's total shares outstanding, will
acquire the remaining 32% equity interest in the Company. Moreover, the
acquisition proposal is manifestly unfair as it is below the fair market value
of the Company on a private market basis and/or as a multiple of said value,
according to independent valuations preformed by financial analysts familiar
with the Company and the pharmaceutical industry.
PARTIES
-------
2. Plaintiff Patrick F. Columbo, residing at 34 Sunset Ridge Road,
Franconia, New Hampshire, 03580, at all times relevent hereto, owned Rorer
common stock.
3. Defendant Rorer is a Pennsylvania corporation with its principal
executive offices located at 500 Arcola Road, Collegeville, Pennsylvania 19426.
Rorer is primarily engaged in the discovery, development and marketing of
pharmaceutical products for human use. As of February 28, 1997, the Company had
136.82 million shares of common stock outstanding. For the fiscal year ended
December 31, 1996, the Company reported net income of $473.5 million, or $3.16
per share, on revenues of $5.42 billion.
4. Defendent Rhone-Poulenc is a multinational conglomerate that
manufactures chemicals, polymers, fibers, pharmaceuticals and agricultural
chemicals. Rhone-Poulenc's
<PAGE>
principal place of business is 25 Quai Paul Doumer, 92408 Courbevoie Odax,
France. As of February 27, 1997, Rhone-Poulenc owned approximately 86.806
million shares, or 68.3% of Rorer common stock.
5. At all relevant times herein, defendant Michel de Rosen ("Rosen") was
Chief Executive Officer of the Company and Chairman of its Board of Directors
(the "Board"). Rosen is also a member of the Executive Committee of
Rhone-Poulenc.
6. At all relevant times herein, defendant Timothy J. Rothwell
("Rothwell") was President of Rorer, and a member of the Board.
7. At all relevant times herein, defendant E. Manford Karobath
("Karobath") was Executive Vice President of the Company and a member of the
Board.
8. At all relevant times herein, defendant Jean-Mare Bruel ("Bruel") was
Vice Chairman of Rhone-Poulenc Group, a member of Rhone-Poulenc's Executive
Committee, and a member of the Board.
9. At all relevant times herein, defendant Robert E. Cawthorn
("Cawthorn") was Chairman Emeritus of the Company and a member of the Board.
Cawthorn was Chief Executive Officer of the Company and Chairman of the Board
from 1986 to 1995.
10. At all relevant times hereto, defendant Claude Helms ("Helms") was
Vice President and director of Rhone-Poulenc, and a member of the Board.
11. At all relevant times hereto, Jean-Jaques Bertrand ("Bertrand") was
a member of the Board. From 1990 to 1993, Bertrand was an Executive Vice
President of the Company, and from 1987 to 1990 was a President at Rhone-Poulenc
Sante.
-3-
<PAGE>
12. At all relevant times hereto, defendant Igor Landau ("Landau") was a
member of Rhone-Poulenc's Executive Committee and a member of the Board.
13. At all relevant times hereto, defendant Jean-Pierre Tirouflet
("Tirouflet") was Chief Financial Officer of Rhone-Poulenc, a member of its
Executive Committee, and a member of the Board.
14. At all relevant times hereto, the following Individual Defendants were
also members of the Board of Rorer and/or committees thereof as follows:
(a) Defendant James S. Riepe ("Riepe") was a member of the Board and
a member of the Boards' Audit and Compensation Committees.
(b) Defendant Eric Topol ("Topol") was a member of the Board.
(c) Defendant Dale F. Frey ("Frey") was a member of the Board and a
member of the Boards' Audit and Nominating Committees.
(d) Defendant Charles-Henri Filippi ("Filippi") was a member of the
Board.
15. By virtue of their positions as directors and/or senior executive
officers of Rorer and their exercise of control over its business and corporate
affairs, defendants Rosen, Rothwell, Karobath, Bruel, Cawthorn, Helene,
Bertrand, Landau, Tirouflet, Riepe, Topol, Frey and Filippi (collectively the
"Individual Defendants") had, at all relevant times, the power to control and
influence, and did control and influence, and cause Rorer to engage in the
practices complained of herein.
16. Each Individual Defendant owes Rorer and its public stockholders
fiduciary obligations and is required to:
-4-
<PAGE>
(a) use his ability to control and manage Rorer in a fair, just and
equitable manner;
(b) maximize shareholder value;
(c) act in furtherance of the best interests of Rorer and its public
stockholders;
(d) govern Rorer in such a manner as to heed the expressed views of
its public shareholders;
(e) refrain from abusing his position of control;
(f) provide full disclosure to the public shareholders; and
(g) not favor his own or any other party's interests at the expense of
Rorer and its public shareholders.
17. At all relevant times hereto, defendant Rhone-Poulenc owned and
controlled approximately 68 percent of the outstanding shares of Rorer common
stock.
18. Rhone-Poulenc has failed to discharge its fiduciary duties to
plaintiff and the other members of the Class. Rhone-Poulenc exercises domination
and control over the affairs of Rorer by virtue of its representation on the
Company's thirteen member Board.
19. As a result of Rhone-Poulenc's domination and control over the Board,
said defendant has decided to sell to itself the remaining outstanding shares of
Rorer at a grossly inadequate price to the detriment of the other public
shareholders.
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CLASS ACTION ALLEGATIONS
------------------------
20. Plaintiff brings this action pursuant to Rule 1702 of the
Pennsylvania Rules of Civil Procedure, for declaratory, injunctive and other
relief on his own behalf and as a class action, on behalf of all public
stockholders of Rorer (except defendants herein and any person, firm, trust,
corporation or other entity related to or affiliated with any of the defendants)
and their successors in interest, who are being deprived of their equity
interest in Rorer and the opportunity to maximize the value of their Rorer
shares by the wrongful acts of the defendants described herein.
21. This action is properly maintainable as a class action for the
following reasons:
(a) The class of stockholders for whose benefit this action is
brought is so numerous that joinder of all class members is impracticable. As
of February 28, 1997 Rorer had approximately 136.8 million shares of common
stock duly issued and outstanding, which trade on the New York Stock Exchange,
and are owned by thousands of shareholders. Members of the Class are scattered
throughout the United States.
(b) There are questions of law and fact that are common to the
members of the Class and that predominate over any questions affecting any
individual members. The common questions include, inter alia, the following:
----- ----
(i) whether the defendants have engaged in conduct
constituting unfair dealing to the detriment of the public stockholders of
Rorer;
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(ii) whether the proposed acquisition proposal by Rhone-Poulenc of
$97 per share is unfair to the public stockholders of Rorer because it does
not constitute a fair price for the shares of the Company; and
(iii) whether the defendants have breached their fiduciary and common
law duties owned by them to plaintiff and the other members of the Class.
(c) The claims of plaintiff are typical of the claims of the other
members of the Class, and plaintiff has no interests that are adverse or
antagonistic to the interests of the Class.
(d) Plaintiff is committed to the vigorous prosecution of this action and
has retained competent counsel experienced in litigation of this nature.
Accordingly, plaintiff is an adequate representative of the Class and will
fairly and adequately protect the interests of the Class.
(e) The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, and that would establish incompatible
standards of conduct for the party opposing the Class.
(f) Defendants have acted, and are about to act, on grounds generally
applicable to the Class, thereby making appropriate final injunctive or
corresponding declaratory relief with respect to the Class as a whole.
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<PAGE>
(g) Plaintiff anticipates that there will be no difficulty in
the management of this litigation. A class action would provide a fair
and efficient method for the adjudication of this controversy.
CLAIM FOR RELIEF
----------------
22. Rorer is a corporation duly organized and existing under the laws
of the Commonwealth of Pennsylvania and maintains its principal executive
offices at 500 Arcola Road, Collegeville, Pennsylvania 19242. Rorer is primarily
engaged in the development, manufacture, and marketing of a line of
pharmaceutical products, including prescription drugs, over-the-counter
medicines and plasma-derived products. Rorer is a majority-owned subsidiary of
Rhone-Poulenc.
23. Rorer has approximately 136.8 million shares of common stock
outstanding, of which approximately 62.3% are owned by Rhone-Poulenc. The
remaining approximately 42 million shares are held by at least several hundred
public shareholders of record other than defendants.
24. The Company's products are focused in the high-growth area of the
respiratory, cardiovascular and oncology markets. In 1995 and 1996, the
Company's common stock was the best performing stock in the S&P pharmaceutical
stock universe, with a total average annual return of 35.2%. The stellar
performance of the Company's common stock mirrored the strong performance of its
key products, such as Lovenox, which in 1996 showed
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<PAGE>
revenue growth of 49%, and Nasacort, which in the same period showed revenue
growth of 40%.
25. However, the Company quickly and unexpectedly found itself in a crisis
when concerns were raised that two of its plasma-based products, Albuminar and
Plasma Plex, may have been contaminated by bacteria.
26. In March, 1997, Rorer announced that Centeon, LLC ("Centeon"), which
is a joint venture between the Company and Hoechst A.G. established to
manufacture plasma products, would temporarily cease manufacturing its two
products to allow for "full implementation of new production improvements." The
cessation of manufacturing at Centeon followed a worldwide recall of Albuminar
and Plasma Plex due to fears of bacterial contamination, which in turn spurred
an investigation by the Food and Drug Administration.
27. In response to the shut-down at Centeon, the price of Rorer common
stock began to lag the market significantly and, by late April 1997, Rorer's
common stock was trading at a discount to its peer group and approximately 15%
below its 1996 closing price.
28. Analysis, however, viewed the Company's problems at Centeon as a
"one-time event" and continued to view favorably Rorer's future. Indeed, in a
report dated April 16, 1997, issued by Morgan Stanley & Co., investors were
informed that Rorer's stock would be "materially higher" in a year or two. The
-----------------
report stated:
We view this Centeon situation as a one-time event -- just
painfully protracted, as was Warner-Lambert's Puerto Rican
problem four years ago. Were it not for the improving core
--------------
fundamentals, we would be less patient. In this case, RPR
-----------
remains a peripheral name, representing good value, in our
view;
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<PAGE>
in a year or two, the stock should be materially higher (emphasis
-------------------------------------------------------
added).
29. On June 26, 1997, in order to take advantage of Rorer's temporarily
depressed stock price, Rhone-Poulenc announced it was considering an offer (the
"Offer") to acquire all of the shares of Rorer it does not already own in a cash
transaction whereby Rhone-Poulenc would pay $92.00 cash for each of such shares.
30. Finally, on August 20, 1997, Rhone-Poulenc and the Company announced
that a definitive agreement had been approved and signed by both parties whereby
Rhone-Poulenc would acquire the remaining shares of the Company in a tender
offer (the "Tender Offer") at $97 per share.
31. Shareholders and analysts of Rhone-Poulenc applauded the "excellent
price" that Rhone-Poulenc was able to negotiate for itself, believing that
Rhone-Poulenc would need to pay $110 per share to acquire Rorer at fair market
value, and in response the public shares of Rhone-Poulenc quickly rose 6.2% on
heavy trading in Paris.
32. Shareholders and analysts of Rorer, however, were deeply dismayed.
Many Rorer analysts had valued the Company at least $100 per share, while one
prominent pharmaceutical analyst, as reported by Bloomberg News on August 13,
--------------
1997, valued the Company at $105 per share.
33. Rhone-Poulenc is taking advantage of its majority stock ownership
position in Rorer by imposing the inadequate Tender Offer on Rorer's public
stockholders.
34. The Tender Offer is part of a sweeping corporate overhaul of
Rhone-Poulenc, meant to benefit solely Rhone-Poulenc.
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<PAGE>
35. Pursuant to the planned overhaul, Rhone-Poulenc intends to spin
off its chemical, fibers, and polymer operations, in order to become one of the
world's biggest pharmaceutical companies, by combining Rorer's business with
Rhone-Poulenc's vaccine and animal health businesses.
36. According to an article in The Wall Street Journal dated June 27,
-----------------------
1997, the chemical business has been less profitable than the pharmaceutical
business and has weighed down Rhone-Poulenc's profits and price share. Thus,
Rhone-Poulenc's plan is to divest itself of its less profitable businesses and,
taking advantage of its dominant position over Rorer, as well as Rorer's
temporarily depressed share price, acquire from the public shareholders of
Rorer, at an inadequate consideration, Rorer's more profitable pharmaceutical
business.
37. Given Rhone-Poulenc's domination and control of Rorer, the Rorer
Board cannot be expected to act independently and advocate the best interests of
Rorer's public shareholders.
38. By virtue of its control and domination of Rorer, Rhone-Poulenc
has unique knowledge of the Company and has access to information denied or
unavailable to the public.
39. Given the domination and control of Rorer, the Individual
Defendants cannot be expected to negotiate for the best and highest price for
Rorer's public shareholders.
40. In view of defendant Rhone-Poulenc's control of Rorer, it is
unfair and in violation of defendants' fiduciary duties to consummate the
transaction without first obtaining a recommendation and input by a truly
independent representative of the public stockholders or obtaining the majority
approval of the public stockholders.
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<PAGE>
41. By virtue of the acts and conduct alleged herein, the defendants
are carrying out a preconceived plan whereby Rhone-Poulenc will acquire the
minority public shares of Rorer pursuant to a price that is grossly inadequate
and intrinsically unfair to Rorer public shareholders, is substantially below
true value, and is a product of defendants' conflicts of interest. As a result,
the public common stockholders of Rorer will be wrongfully deprived of their
valuable investment in the Company and all of its present and continuing
profitability and growth and will receive, in return for their investment,
grossly inadequate consideration.
42. The proposed Tender Offer constitutes an improper and unlawful
attempt by the defendants unfairly to cash-out the minority shareholders of
Rorer.
43. Unless enjoined by this Court, defendants will continue to breach
fiduciary duties owed to plaintiff and the other members of the Class, and will
succeed in consummating an unfair transaction by virtue of the unfair dealing
complained of herein, all to the irreparable harm of the Class.
44. Plaintiff and the other members of the Class have no adequate
remedy at law.
WHEREFORE, plaintiff demands judgement and relief in his favor and in
favor of the Class and against defendants, as follows:
A. Declaring that this action be certified as a proper class actions
and certifying plaintiff as a class representative;
B. Declaring that the defendants and each of them have committed a
gross abuse of trust and have breached their fiduciary duties to plaintiff and
other members of the class;
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<PAGE>
C. Preliminarily and permanently enjoining defendants and their counsel,
agents, employees and all persons acting under, in concert with, or for them,
from proceeding with, consummating or closing the proposed Tender Offer that
will irreparably harm plaintiff and the Class;
D. In the event the Tender Offer is consummated, rescinding it and setting
it aside and/or granting rescissory damages;
E. Awarding compensatory damages in excess of Fifty Thousand ($50,000.00)
dollars or the mandatory compulsory arbitration limits, whichever is greater.
F. Awarding the costs and disbursements of this action;
G. Awarding plaintiff counsel fees; and
H. Awarding such other and further relief which the Court may deem just
and proper.
Dated: August 25, 1997
SPECTOR & ROSEMAN
/s/ Anthony Chu
-----------------------
Robert M. Roseman
Anthony Chu
2000 Market Street
Philadelphia, PA 19103
(215) 864-2400
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<PAGE>
OF COUNSEL:
BERNSTEIN LITOWITZ BERGER
& GROSSMANN LLP
Vincent R. Cappucci
Kevin M. McGee
1285 Avenue of the Americas
New York, New York 10019
(212) 554-1400
MAGER LIEBENBERG & WHITE
Ann D. White
Two Penn Center Plaza
Philadelphia, PA 19102
(215) 569-6921
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