Being private makes Wrigley deal work: Mars

By Brad Dorfman

CHICAGO (Reuters) - Mars Inc's status as a private company allowed it to offer a $23 billion price for Wm Wrigley Jr Co (WWY.N: Quote, Profile, Research, Stock Buzz), which might not have been possible for a publicly traded company, a top Mars executive said on Monday.

Mars, the maker of M&M's and Snickers, agreed to pay $80 a share for the world's largest chewing gum maker, a 23 percent premium to Friday's closing price on a stock that was already trading near the top multiples of the U.S. food industry.

While Paul Michaels, Mars' global president, allowed that the proposed price was "rich," he said it made sense for Mars.

"Based on the way we were set up, privately, we have a better chance to make a deal like this work than most other companies," Michaels said in an interview with Reuters.

Mars invests all of its profits back into its business, while a public company generally pays dividends and has other obligations, Michaels said.

Being able to make longer-term investments is one reason that Mars currently plans to remain private, Michaels said.

"One of our principles is the freedom principle, which means we make money, but we invest it in the business, which allows us to be free," Michaels said. "We don't have any thoughts about doing an IPO."

Being part of a private company, with such a structure, was attractive to Wrigley, chairman Bill Wrigley said during the same interview.