Shares in Depomed rocketed 37% as biopharmaceutical firm Horizon Phama said it was taking its bid for the company hostile, after revealing that the offer it made to acquire all of Depomed’s outstanding shares in May was rejected. Horizon’s shares were down about 6 percent at $32.52.
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Horizon’s said its work on specialty treatments and primary care would complement Depomed’s products for pain and central nervous system disorders.
The offer of $29.25 represents a premium of about 42% from Monday’s closing price of $20.64. Plus, given Horizon’s 2014 inversion deal, which moved its nominal headquarters to Ireland, the deal comes with tax savings, too.
Over the last couple of years Depomed shareholders had approached him to discuss a possible deal, he added. Depomed shareholders would own about 25 percent of the combined company if the deal occurs, as indicated by Horizon, which would retire $575 million of senior secured notes with cash and new debt. Walbert did raise the fact that Depomed hasn’t shared information with Horizon that it hasn’t shared with the public; such confidential info could influence Horizon’s valuation calculation.
Horizon, which first offered to buy Depomed in May, said the all-stock deal would allow it to nearly double its current portfolio of marketed drugs. The transaction, if consummated, would be immediately and substantially accretive to Horizon’s adjusted earnings per share.
J&J received a subpoena from the Department of Health in 2013 over marketing practices for Nucynta, which is currently facing a generic threat from Allergan Plc (AGN.N).
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Citigroup Inc. and Jefferies LLC are serving as lead financial advisers to Horizon.
