The hostile $3 billion proposal was offered after DepoMed rejected a previous proposal made in May.
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The Dublin-based company said Tuesday that it will take an offer of $29.25 of its stock for each Depomed share directly to that company’s shareholders.
The unsolicited bid – which includes debt – follows earlier rejected attempts for a deal.
“We have elected to bring this proposal to the attention of Depomed’s shareholders, who we expect, given the opportunity to understand the financial, strategic and operational benefits of this transaction will support it and will encourage their board and management to begin constructive discussions with us promptly”, Timothy P. Walbert, the Horizon Pharma chairman, president and chief executive, said in the statement.
Depomed said its transformation has delivered tremendous value to its shareholders, with Depomed’s stock price recently reaching an all-time high of $28.16 on April 27, 2015.
Horizon is trying to grow through deals. Plus, given Horizon’s 2014 inversion deal, which moved its nominal headquarters to Ireland, the deal comes with tax savings, too.
Horizon wants to use an all-stock deal for Depomed so that it can save cash and debt for other deals, Robert Carey, Horizon’s chief business officer, said on a conference call with investors Tuesday.
Horizon’s said its work on speciality treatments and primary care would complement Depomed’s products for pain and central nervous system disorders.
Horizon, which manufactures drugs to treat arthritis pain and rare diseases, is offering $29.25 per Depomed share in a stock transaction, 42 percent more than Depomed’s closing price yesterday.
Back in January, Depomed agreed to buy U.S. license rights and related royalty obligations for the Nucynta (tapentadol) opioid pain drug franchise from Johnson & Johnson’s Janssen Pharmaceuticals for $1.05 billion. Full-year pro forma sales would exceed $950 million, with an adjusted EBITDA of $350 million. On average, analysts predict that Horizon Pharma PLC will post $1.22 earnings per share for the current fiscal year.
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Citigroup Inc. and Jefferies LLC are serving as lead financial advisers to Horizon.
