Thomson Financial Services with Pharmacia and Monsanto - 'From Failed Merger to Wall Street's Top Drug Pick'
What do you do when a merger draws negative reaction from everyone? Bemoan it, shut the door and turn off the phones and computer? Not for Pharmacia & Upjohn and Monsanto. Instead with the help of Thomson Financial Services' D. F. King and C-2 Creative, they used PR and investor relations to turn the situation around.
Both companies badly needed the merger. Pharmacia had a good three-year run going into the merger and made the popular arthritis medication Celebrex, but suffered from low profit margins. Monsanto, with a controversial agricultural product list but a respected drug business, had failed twice before to merge with a top-tier firm.
The challenge, then, was huge. Shareholders opposed the merger, having failed to see its value. Media and analysts picked up on and echoed that concern. And the companies' primary proponents were restricted from publishing opinions because of merger conflicts.
Employing a modest dollars 400,000 budget, the merger partners simultaneously tackled all three main targets - stockholders, stock analysts and the media. Company management met with the largest shareholders to hear their concerns directly. The investor relations team from Thomson and its two clients shored up contacts with analysts who were not restricted, including Steve Tighe at Merrill Lynch, the number one pharmaceutical analyst. Meanwhile public relations aggressively tried to convince the media of the merger's benefits, through press releases and management interviews.
Perhaps most significantly, an international road-show fronted by senior management visited 14 cities over 10 days. The first day, in a conference call to investors, the company outlined the merger's rationale and set out pro forma sales and earnings projections. During the first two days, the trading gap for the two companies' stock narrowed from 16% to 7%.
The IR team then set about educating analysts, addressing the concerns of both agricultural and pharmaceutical constituencies. Included in the brief was a proposal to unlock the value of the businesses through a partial IPO of the agricultural division.
The two companies' coordinated effort clicked. Tighe became Wall Street's strongest advocate for the merger. After company management met with more than 50% of shareholders during the road show - a key goal - it became clear that investor sentiment had shifted. The trading gap dropped to 2%.
In the end, 94% of shareholders at each company approved the deal when the vote was taken on March 24, 2000. And since the completion of the merger, Pharmacia Corporation became the most highly rated pharmaceutical company on Wall Street, overtaking industry leader Pfizer.
Imre & Associates and US Foodservice - US Foodservice Launches NextDayGourmet.com
Before launching its online unit, NextDayGourmet.com, in November 1999, US Foodservice staged an all-day 'World's Largest Cyber Cafe' at the New York Stock Exchange, dispensing hot coffee and muffins to 15,000 work-bound Wall Streeters. The event was the brainchild of PR firm Imre & Associates, and was accompanied by press releases, live TV broadcasts and analyst presentations, all with the goal of making NextDayGourmet.com stand out amidst the Web clutter. It worked: the site surpassed its online sales forecasts, and the breakfast stunt attracted a Paris-based gourmet company to co-market a shared brand on the NextDayGourmet.com site.
Winner 2000: Paine Webber - Beyond the Basics: Investment Strategies for Women
The category is for work that is targeted primarily at investors/stakeholders or other financial audiences.
- Thomson Financial Services and Pharmacia and Monsanto - 'From Failed Merger to Wall Street's Top Drug Pick'
- Imre & Associates and US Foodservice - Launch of NextDayGourmet.com
- Ogilvy and AsiaInfo - China's First NASDAQ IPO
WEBER SHANDWICK WORLDWIDE
With worldwide revenue of more than dollars 300 million and 2,600 employees in 76 offices in 21 countries, Weber Shandwick Worldwide is the world's largest public relations agency. The agency is the world leader in key practice areas such as public affairs, technology and entertainment/lifestyles.