Valeant Pharmaceuticals International Inc. (VRX) increased its offer for Obagi Medical Products Inc. (OMPI) to about $417 million, to counter a competing bid for the maker of prescription skin care products. Obagi rose above the new offer in early trading.
Valeant’s new offer of $24 a share is an increase from the $19.75 bid the companies agreed to last month. Obagi’s board unanimously supports the amended bid, Montreal-based Valeant said in a statement today.
Valeant’s move tops closely held Merz Pharma Group’s offer of $22 a share. The bid from Merz Pharma was unsolicited, Long Beach, California-based Obagi said after the proposal from the Frankfurt-based company was announced yesterday.
Obagi rose 8.8 percent to $24.89 at 8:33 a.m. New York time, topping the new Valeant bid and indicating that investors may expect an even higher offer. The company had gained 49 percent from March 19, the day before Valeant’s $19.75 offer was made public, through yesterday.
Obagi’s biggest product is Nu-Derm, an anti-aging treatment. The therapy had about $62 million in sales last year.
Obagi’s investors have been pushing for a sale of the company, led partly by Voce Capital LLC, a hedge fund. In December, the fund’s managing partner J. Daniel Plants wrote the board and called for its replacement and a more thorough sale process than it said Obagi had previously conducted.
Valeant’s new offer will expire April 23 at midnight.
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