Horizon Pharma Plc raised its hostile bid for Depomed Inc. by 13 percent to $1.98 billion in stock, seeking to bring the painkiller maker to the negotiating table.
Horizon, a biopharmaceutical company developing treatments for rare diseases, increased the proposed price to $33 a share from $29.25, the company said in a statement today. The offer is contingent on Depomed entering discussions with Horizon.
While Depomed’s board will review the new proposal, the company noted in a statement that the higher bid reflected the recent gain in Horizon’s stock price and didn’t mean Depomed investors would get more shares of Horizon.
Horizon is pursuing Depomed to expand in treatments for pain and central nervous system conditions, and sweetened its offer after Depomed refused to engage in discussions. By combining, the companies could save on overlapping costs and could expand sales of Depomed’s products, Horizon has said.
“Based on discussions we’ve had with Depomed’s largest shareholders as well as our own shareholders, it is clear that they and the investment community strongly support a combination of our two businesses,” Timothy Walbert, chairman and chief executive officer of Horizon, said in the statement. “We call upon Depomed’s board of directors to listen to their shareholders.”
Depomed shares have climbed 62 percent since the previous bid, valued at $1.8 billion, was made on July 7.
On Tuesday, Horizon fell 1.6 percent to $37.70 at 11:28 a.m. in New York. Depomed gained 2.4 percent to $33.51, suggesting that investors think there could be a higher offer coming, either from Horizon or another bidder.
After Horizon’s initial offer this month, Depomed’s board “unanimously determined that it was not in the best interests of Depomed or its shareholders to pursue the prior proposal,” the target company said on July 7, adding that Horizon’s offer was barely higher than Depomed’s previous 52-week high of $27.65 in April.
On Monday, Horizon raised its forecast for 2015 revenue, citing demand for its rare diseases drugs. The Dublin, Ireland-based company said sales will reach $660 million to $680 million this year, up from a prior range of $590 million to $610 million.