Sept. 26 (Bloomberg) -- Alpharma Inc.'s chief executive officer said King Pharmaceuticals Inc.'s $1.6 billion takeover bid is too low and ``multiple companies and a mixture of players'' are being considered as buyers.

Alpharma's board unanimously opposed King's $37 a share offer, which was taken directly to shareholders, Alpharma said today in a statement. King's offer was ``financially inadequate compared with what we believe is the potential return for shareholders,'' CEO Dean Mitchell said in a telephone interview. Alpharma rose above King's bid in New York trading as investors anticipated a higher proposal.

King began a tender offer for all Class A shares of Bridgewater, New Jersey-based Alpharma on Sept. 12. The two companies compete to develop abuse-resistant painkillers. King started the buyout attempt after Alpharma rebuffed a bid of $33 a share in August. Now Alpharma has rejected the $37 price.

``It was a smart move,'' said Kevin Kedra, an analyst at Gabelli & Co. in Rye, New York, who recommends that investors purchase Alpharma shares. ``If King truly wants to buy this company they will have to raise their price. The value is $40 a share based on 2008.''

Alpharma rose 67 cents, or 1.8 percent, to $37.25 at 4:05 p.m. in New York Stock Exchange composite trading. The shares have climbed 72 percent in the past 12 months. King fell 12 cents, to $9.76.

King, based in Bristol, Tennessee, said the offer would provide Alpharma shareholders with a 67 percent premium over the closing price on Aug. 4, the date of King's initial offer.

``Given the uncertainty in the financial markets, we believe it is in the best interests of Alpharma stockholders to consummate our transaction as quickly as possible,'' King said today in a statement.

Bank Financing

King's offer will expire Oct. 10, unless extended, and the drugmaker won't buy any shares unless at least 25.1 million are tendered, guaranteeing majority control. The company has said it obtained a commitment of as much as $1 billion in financing to help complete the tender offer, from parties including units of Credit Suisse Group AG and Wachovia Corp.

Mitchell wouldn't identify potential buyers other than King, saying the group includes companies from the U.S., Europe and Japan and ranges from mid-size to large pharmaceutical companies. Alpharma will move to find a buyer as ``rapidly as we can,'' and there is no guarantee a deal will be made, Mitchell said.

The company is a buyout target because it has drugs in development that other companies covet, plus an anti-inflammatory product called the Flector patch already being sold, according to Kedra.

Priority Review

Mitchell said King's offer was timed to take advantage of the pending priority review by the U.S. Food and Drug Administration for an abuse-deterrent opioid, Embeda, which Alpharma is developing. The drug will be sold beginning in the first quarter of 2009 if the FDA approves it, Mitchell said.

Embeda would be a useful asset for King, because the drug complements King's abuse-deterrent opioid, Remoxy, said Gary Nachman, an analyst at Leerink Swann & Co. in New York.

``Strategically, it makes a lot of sense,'' Nachman said of King's Alpharma pursuit. ``A combined company, bringing them together, could create a lot of synergies.''

Shift in Focus

King needs new products to support a shift in focus to pain drugs after its best seller, the blood-pressure pill Altace, lost patent protection and began facing lower-cost generic competitors last year. The drugmaker lost almost one-fifth of its market value on Aug. 7 after reporting that generic Altace competition eroded sales and profit in the second quarter.

``Alpharma has a very interesting technology that is several years ahead of most of their competitors,'' Kedra said.

Kedra said companies that may be interested in acquiring Alpharma include Cephalon Inc., Endo Pharmaceuticals Holdings Inc. and Forest Laboratories Inc.

Nachman said Eli Lilly & Co., Pfizer Inc. and Schering- Plough Corp., along with other companies from Japan and Europe seeking a stronger presence in the pain market, are also potential buyers.

Pfizer spokeswoman Sally Susman and Endo Pharmaceuticals chairman Roger Kimmel didn't return calls seeking comment. Cephalon spokeswoman Candace Steele, Schering-Plough spokesman Fred Malley, Forest spokesman Frank Murdolo and Lilly spokesman Mark Taylor declined to comment.

To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net.

Last Updated: September 26, 2008 17:20 EDT