By Tess Stynes
Merz Pharma Group withdrew its roughly $385 million offer to
acquire Obagi Medical Products Inc. (OMPI), citing Valeant
Pharmaceuticals International Inc.'s (VRX, VRX.T) sweetened bid for
the specialty pharmaceutical company last week.
"Obagi was an opportunity worth pursuing given its complementary
fit with Merz's portfolio of injectables," said Merz Chief
Executive Philip Burchard. "However, Merz is a disciplined buyer
and at this level the economics of such a transaction do not meet
our requirements. We look forward to exploring other acquisition
opportunities that fit our strategy."
Valeant last Wednesday boosted its offer for Obagi Medical to
$24 a share, increasing the value of the proposed deal to about
$420 million from its earlier offer of $345 million.
Valeant had agreed to buy Obagi in late March, but
Frankfurt-based Merz last Tuesday disclosed a $22-a-share cash
offer, or roughly $385 million, and said it wanted stockholders to
have an opportunity to benefit from its "superior proposal."
Obagi, a specialty pharmaceutical company, develops proprietary
topical aesthetic and therapeutic prescription-strength skin-care
systems, which generated about $120 million in revenue last
year.
Valeant and Merz develop a range of pharmaceutical products in
dermatology and neurology.
Valeant shares closed Friday at $71.79 while Obagi shares closed
at $25.42. Neither was active in recent premarket trading. Obagi
shares have risen 87% this year, including 29% this month.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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