DJ King Pharma Discloses Rejected $1.43B Bid For Alpharma
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King Pharmaceuticals Inc. (KG) publicly disclosed a $1.43 billion takeover offer for fellow drug maker Alpharma Inc. (ALO) that the rival rejected earlier this month.
The $33-a-share bid is a 37% premium to Alpharma's Thursday closing price of $24.04, and King noted in a letter dated Friday to Alpharma President and Chief Executive Dean Mitchell that the company stands ready to negotiate a deal.
Alpharma shares surged 41% premarket to $34 while King fell 1% to $11.12.
King Chief Executive Brian Markinson called the deal "too compelling to ignore," saying that it would create a diversified pharmaceutical company with the ability to sustain "long-term growth to better address the changing health care industry and provide meaningful, cost-effective medicines that improve the quality of life for patients."
By disclosing the rejected bid, King said it was hoping to inform shareholders, as it has a "strong preference" to complete a friendly deal.
Earlier this month, King reported that its second-quarter net income tumbled 34% as sales of its formerly top-selling Altace blood pressure drug were hampered by an influx of generic brands. Last year, King - which makes branded drugs in several niche markets, including neuroscience and critical care - lost a patent case, opening the drug to competition, and has tried to refocus its portfolio.
Acquiring Alpharma, producers of pain treatments as well as medicines for livestock, could provide King with "an expanded portfolio of pain management products and a strengthened pipeline, which would include multiple platform technologies," King said.
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