Horizon in ‘hostile bid’ for US pharma
The unsolicited bid — which includes debt — follows earlier rejected attempts for a deal.
Horizon is offering $29.25 per share for Depomed in a stock transaction, 42% more than Depomed’s closing price, the Illinois-based company said in a statement. The equity value of the deal is about $1.8bn.
Horizon began trying to start talks in March with Depomed’s management and board, which “refused to engage in discussions with us and rejected our proposal”, Horizon chief executive Timothy Walbert said in the statement.
A Depomed representative did not immediately respond to a phone call and email seeking comment.
Horizon, which develops treatments for rare diseases, is trying to grow through deals. Last year, the company moved its legal address to Dublin, though kept its operations in Illinois, which cut its US tax bill through a ‘tax inversion’.
It made the address switch using the September 2014 acquisition of Irish-incorporated Vidara Therapeutics International for $660m, then followed up in May with an $866m deal for Hyperion Therapeutics.
Horizon wants to use an all-stock deal for Depomed so it can save cash and debt for other deals, chief business officer Robert Carey said yesterday.
“We continue to have a longer-term objective of looking at additional transactions and believe this provides as much flexibility as we need,” he said.
Horizon’s said its work on speciality treatments and primary care would complement Depomed’s products for pain and central nervous system disorders.
Depomed, which had $390m in sales last year, makes painkillers and anti-seizure drugs, including an opioid pain pill it bought from Johnson & Johnson for $1.05bn in April. Horizon had $297m in sales in 2014, and sells drugs that fight inflammation, arthritis pain, and rare diseases.
A deal would add “immediately and substantially” to earnings, Horizon said. Depomed shareholders would own about 25% of the combined company if the deal occurs, according to Horizon, which would retire $575m of senior secured notes with cash and new debt.
The combined company would have 13 marketed medicines, nearly doubling Horizon’s current portfolio, it said.
Citigroup and Jefferies LLC are serving as lead financial advisers to Horizon.
