The battle to buy dermatology specialist Obagi Medical Products has taken another turn with the US firm agreeing to an increased bid from Valeant Pharmaceuticals International a day after the latter's previous offer had been topped by Germany's Merz Pharma Group.
Obagi and Valeant agreed a deal last month when the Canadian drugmaker offered $19.75 per share, valuing the former at around $344 million. However, Merz then bid $22 per share, or some $383.5 million, prompting Obagi to issue a statement that it was evaluating the unsolicited offer as its board "realises that time is of the essence in this matter".
However no response was required as Valeant almost immediately upped its offer to $24.00 per share in cash and Obagi's directors have unanimously approved the amended transaction.
It is unclear whether Merz will come back with another offer. When making its move, the company said it had made "a superior proposal", as it has the necessary cash on hand to fund a deal and does not require additional due diligence.
However, Merz had issued a statement saying it was "very surprised by, and disappointed with" Obagi’s initial merger agreement with Valeant, seeing as how it had been in ongoing discussions with the former. "Unfortunately, we were not made aware that Obagi was contemplating signing a deal with another party on an accelerated timeframe and were never asked for our best and final bid", the firm said.
It looks as though Valeant has won the day for Obagi which specialises in topical aesthetic and therapeutic skin-health systems with a product portfolio that includes dermatology brands dispensed by dermatologists and plastic surgeons. Its revenues last year reached $120 million.