AMAG Board Says Shareholders Should Vote for Allos Purchase
AMAG Pharmaceuticals Inc. (AMAG), the maker of the anemia drug Feraheme, urged investors today to support its $189 million bid for cancer drugmaker Allos Therapeutics Inc. (ALTH) over the objections of MSMB Capital Management.
MSMB Capital, a New York-based hedge fund that owns 5.9 percent of AMAG, said in a statement yesterday that it opposes AMAG’s attempt to purchase Allos. MSMB in August made an unsolicited $378 million offer for AMAG, based in Lexington, Massachusetts.
AMAG is working with Allos, based in Westminster, Colorado, to complete the all-stock acquisition valued at $2.44 a share when the deal was announced in July. It’s now worth about $1.79 after declines in AMAG’s share price. AMAG investors are scheduled to vote on the Allos acquisition on Oct. 21.
“Do not rely on MSMB Capital’s illusory proposal,” AMAG said in a filing today to investors. “Your Board believes that the combination with Allos will create a financially strong company.”
Allos shares were unchanged at $1.45 at 4 p.m. New York time. AMAG gained 5.3 percent to $13.94.
“Allos shareholders are getting an excellent price -- and AMAG shareholders may be overpaying,” MSMB said in its statement. Martin Shkreli, MSMB’s chief investment officer, said in announcing his takeover bid on Aug. 3 that AMAG had been mismanaged.
AMAG wants to add Allos to acquire its lymphoma drug Folotyn, which AMAG said has a common customer base. AMAG is seeking new revenue after Feraheme failed to meet second-quarter estimates by five analysts surveyed by Bloomberg. Sales of Folotyn may slow though, Citibank analyst Yaron Werber in New York said in an Oct. 5 note to clients that disparaged the deal.
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