AMAG shareholder is so pissed of AMAG's acqusition of ALTH, it wants AMAG to scrap the deal and buy AMAG.
Amag Pharma receives unsolicited acquisition offer
Amag Pharma receives $381 million unsolicited acquisition offer from MSMB Capital Management
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Companies:
o Allos Therapeutics, Inc.
o AMAG Pharmaceuticals, Inc.
Related Quotes
Symbol Price Change
ALTH 1.75 -0.03
Chart for Allos Therapeutics, Inc.
AMAG 15.90 +1.51
Tom Murphy, AP Business Writer, On Wednesday August 3, 2011, 11:32 am
INDIANAPOLIS (AP) -- Amag Pharmaceuticals Inc. shareholder MSMB Capital Management is so disappointed by the drugmaker's recently announced plan to buy Allos Therapeutics that it wants to scrap that deal and buy Amag outright.
The hedge fund said Wednesday it has offered to buy shares of Lexington, Mass.-based Amag it doesn't already own for $18 each in cash. The offer, worth about $378 million, represents a 25 percent premium over the stock's closing price Tuesday of $14.39. MSMB Chief Investment Officer Martin Shkreli told The Associated Press his firm owns less than 5 percent of Amag and had recently increased its stake. He declined to be more specific.
Shares of Amag jumped nearly 9 percent, or $1.25, to $15.64 in late Wednesday morning trading. Allos Therapeutics shares fell 4 cents, or more than 2 percent, to $1.74.
Amag makes Feraheme for the treatment of iron deficiency anemia in adults with chronic kidney disease. Last month, it announced a plan to buy drugmaker Allos Therapeutics Inc. of Westminster, Colo., for about $268 million in stock in a deal designed to bolster its commercial portfolio and cuts costs.
That proposal left Shkreli surprised and disappointed, according to an Aug. 2 letter he sent to Amag's board of directors. Shkreli told the board he felt they overpaid for Allos, and he didn't like the stock-for-stock combination.
"It's not a healthy transaction," he said in a brief phone interview. "If you've been a shareholder for a long time, and you're waiting for a premium price, you didn't get it with this transaction."
Amag said in a brief statement it would carefully consider the unsolicited MSMB offer, but a company spokesman declined additional comment.
Amag's share price has tumbled about 24 percent since closing at $19.07 July 19, the day before it announced the Allos deal. Shkreli noted that the company's stock has not responded well, and the MSMB offer gives shareholders an alternative to the "poorly viewed" Allos transaction.
Under terms of that deal, Allos stockholders will get 0.1282 shares of Amag stock for each share of Allos. Amag shareholders will own about 61 percent of the combined company, while Allos stockholders will have 39 percent.
Amag will nominate five of the nine members of the new company's board, and its CEO, Dr. Brian J.G. Pereira, will serve as CEO of the new company. Michael Narachi will remain chairman. The combined company will be based in Lexington.
Shkreli said MSMB is prepared to raise its price if that is warranted and if it receives the time and access it needs to conduct due diligence on Amag. MSMB requested that Amag respond by Aug. 15 and said its offer is contingent on an agreement being reached before Sept. 1. It added that its offer is not subject to any financing condition.
"It is imperative that the company be sold now, the transaction with Allos terminated and further erosion of stockholder value be prevented," Shkreli wrote.
