By Michael Calia
Zoetis Inc. said its board has approved a $500 million
share-buyback program, stepping up its efforts to avoid a potential
takeover battle driven by activist investors.
The announcement comes a day after the animal-health products
maker unveiled plans to buy Abbott Laboratories's animal-health
business for $255 million and about a week after activist investor
William Ackman disclosed a stake of about $2 billion in Zoetis.
In response to that move, Zoetis adopted a so-called poison pill
plan, which is used to ward off potential takeovers, although the
company didn't mention Mr. Ackman's Pershing Square Capital
Management LP.
The company's shares, which have risen 17% so far this month,
were off about 1% in midday trading as the company hosted its
investor day in New York.
At that meeting, the company projected slightly
lower-than-expected results for next year. It guided for earnings,
excluding items, of $1.61 to $1.68 a share on revenue of $4.85
billion to $4.95 billion, versus the respective estimates of $1.71
a share and $4.96 billion from analysts polled by Thomson
Reuters.
Zoetis--a Pfizer Inc. spinoff that makes vaccines and medicine
for household pets and livestock--generated $4.6 billion in sales
last year, making it the biggest player in the animal-health
industry.
The deal with Abbott would expand Zoetis's diagnostics business
as more people are having their pets treated for diseases such as
diabetes and cancer.
The Wall Street Journal previously reported Mr. Ackman might
push Zoetis to sell itself to a larger company, such as Valeant
Pharmaceuticals International Inc. The report also said Mr. Ackman
was working with Sachem Head Capital Management LP, another
activist firm.
Write to Michael Calia at michael.calia@wsj.com
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