Bergen Brunswig to Purchase $100 Million of Its Own Stock

Bergen Brunswig Corp.’s board of directors authorized the company Thursday to buy up to $100 million of its flagging stock on the open market.

The company, one of the nation’s largest distributors of prescription drugs and videocassettes, saw its shares drop by almost 20% between April 8 and April 23, falling from $32.50 to $26.125 on the American Stock Exchange.

The stock rebounded slightly Thursday, closing at $26.375.

In a brief press release distributed Thursday afternoon, company President Robert E. Martini called the recent price drop “an opportunity for the company to purchase shares at a price which would be additive to earnings per share and would improve the rate of return on share owners’ equity.” Company officials did not return repeated phone calls Thursday.

The release said the company would buy shares “from time to time in open-market transactions as market conditions warrant.” Bergen Brunswig has about 34.3 million shares outstanding.

Earlier this week, the company issued a press release stating that Raymond James Co., a stock brokerage that follows Bergen Brunswig, had downgraded its recommendation on the company’s stock from buy to hold.

Martini made that announcement “in response to inquiries from the American Stock Exchange about the current (downward) pressure on the company’s stock,” the release said.

The company went on to say that it would not comment on analysts’ reports or recommendations. Martini noted that Bergen Brunswig’s drug company’s sales during the first six weeks of the current fiscal quarter were less than expected but still about 10% ahead of sales for the same period last year.

Video sales, however, were down about 10% for the first seven months of the fiscal year compared to the previous year, the company said.