Horizon Pharma Talks to Depomed Holders About Adding Cash

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Horizon Pharma Plc is talking to Depomed Inc. shareholders about a revised takeover offer that would include as much as 25 percent in cash, though the total value of the proposal would be lower than its current all-stock bid.

Horizon said Thursday it could offer $32.50 a share in stock and cash for Depomed, which has rejected its advances thus far. Alternately, Horizon could stick to its $33-a-share all-stock proposal, exchanging 0.95 Horizon share for each Depomed share.

Depomed issued a statement Thursday afternoon that said the current value of Horizon’s proposal is less than $31 a share, below the previous offer. Depomed said it “will carefully review and evaluate the revised proposal to determine the course of action that it believes is in the best interests of the company and its shareholders.”

The proposal with a cash component would be lower because it would trigger a clause in Depomed’s convertible bonds that would require spending of $38 million, Horizon said.

Horizon, based in Dublin, is pursuing Depomed to expand its line of treatments for pain and central nervous system conditions, and has already sweetened its bid once after the Newark, California-based drugmaker refused to engage in discussions. By combining, the companies could save on overlapping costs and expand sales of Depomed products, Horizon has said.

Horizon Pharma shares fell 2.8 percent to $31.56 at the New York close, while Depomed was little changed at $31.65.

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