Centocor Inc. has begun trading shares of its common stock forthe 2.25 million outstanding units of its financing vehicle TocorII, the Malvern, Pa., company announced on Thursday. Under aproposal announced in December, Centocor will offer $40 foreach Tocor II unit. The $40 will be paid in Centocor commonstock (NASDAQ:CNTO), based on the trading price of the stockduring the 30 consecutive trading days beginning January 14and ending February 25 (provided that the number of Centocorshares issued for each Tocor unit is not less than 2.73 orgreater than 3.2).

The company could issue up to 7.2 million shares of stock inthe transaction if the average value of its stock drops to $12.50per share. At an average trading price of $14.65, it would issue6.1 million shares in acquiring all outstanding Tocor II units.

Each Tocor II unit (NASDAQ:TOCRZ) consists of one share ofTocor II callable common stock, one series T warrant topurchase one share of Centocor common stock, and one callablewarrant to purchase one share of Centocor common stock. Thetotal cost of the reacquisition will be $90 million, the sameamount raised when Tocor II was spun off in January 1992.

Centocor's stock closed at $12.75 per share on Thursday, up 38cents.-- Karl Thiel

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