Advertisement
YOU ARE HERE: LAT HomeCollectionsFixme

Medicis Rejects Unsolicited Offer from Mentor

November 21, 2005|From Reuters

Mentor Corp. said Sunday that it had made an unsolicited takeover offer for Medicis Pharmaceutical Corp., a Scottsdale, Ariz., drug maker that is embroiled in a bidding war of its own for Inamed Corp.

Official word of the all-stock bid, which Mentor said valued Medicis at $2.2 billion, came after Medicis released a statement saying its board had received an offer from Mentor and unanimously rejected it.

In the statement, Medicis said the Mentor bid was "inappropriate in light of the recent trading history of the two companies and the pending stockholder votes on the Inamed merger.

"We continue to unanimously recommend that our stockholders vote in favor of our proposed merger with Inamed as we believe that a combination with Inamed will maximize stockholder value," the company said.

But in its statement, Mentor said it thought its proposed deal was "superior" to the Inamed deal and had a better chance of closing quickly. Joshua H. Levine, president and chief executive of the Santa Barbara-based breast implant maker, also suggested that his company was willing to alter the terms of the offer to include some cash component.

"Should the Medicis board want Medicis stockholders to receive a portion of the consideration in cash, we would be prepared to move in that direction," he said.

In March, Medicis, which makes drugs to treat skin problems, had agreed to buy Inamed Corp., a maker of gel-filled breast implants that is based in Santa Barbara, for $2.8 billion.

But last week, before shareholders of either company had voted on the proposed pact, Allergan Inc., the Irvine-based maker of Botox, stepped in and offered $3.2 billion for Inamed -- a premium of nearly 13% over the closing price of the company's shares at the time of the offer.

Because Inamed's deal with Medicis was subject to shareholder approval, analysts said they thought Inamed would simply pull out of the Medicis pact and merge instead with Allergan.

Merrill Lynch & Co. analyst Gregory Gilbert cut his rating Tuesday on Medicis to "neutral" from "buy," citing Allergan's "superior" offer for Inamed.

"It now appears unlikely that Medicis will be able to acquire Inamed, at least at the previous offer price," Gilbert said in a research note.

Advertisement
Los Angeles Times Articles
|
|
|