Ireland’s Horizon Pharma has made a third offer to acquire Depomed of the US which – like its earlier bids – has been swiftly rejected.
Depomed insists that Horizon’s latest all-stock bid has a value of $30 per share – valuing its business at about $1.81bn – which it says is lower than the previous offer of $33 per share and significantly undervalues the firm.
Horizon has also offered an alternative deal worth $32.50 with a cash component of up to 25%, which Depomed rejected yesterday saying it had a value of $31, once again below Horizon’s prior bid.
The US firm is particularly concerned that under the terms of the new deal its shareholders could end up owning less than 29% of the combined company, which is “well below what Depomed would contribute.”
The increasingly acrimonious saga has continued with Horizon now seeking a Depomed shareholder vote on its proposal that could also give it an opportunity to seed Depomed’s board with a number of nominees of its own choosing “should … current board members be removed by shareholders.”
Horizon first approached Depomed in May and went hostile with its offer in July after it was turned down. Since then, Depomed has adopted a poison pill in the form of a shareholder rights plan to ward off its advances, and replacing board members could provide Horizon with the means to vote that down.
It has proposed seven nominees who it says are “independent and experienced executives, who bring valuable and distinct expertise” to the table.
Horizon has only been an Irish company since 2014, when it carried out a tax-inversion acquisition of Vidara Therapeutics and switched its domicile from the US.
It is pushing the benefits of reducing corporation tax rates to Depomed shareholders whilst also saying Depomed’s portfolio of pain products – including recently acquired flagship product Nucynta (tapentadol) – is a complementary fit with its own range of products for arthritis and rare diseases.
Since acquiring Vidara, Horizon has also bought Hyperion Therapeutics in a $1.1bn deal signed earlier this year. According to analysts an all-stock acquisition of Depomed would still leave the Irish company with cash in hand to fund additional M&A deals.