Horizon Pharma makes hostile, $2.1B bid for Depomed

Horizon Pharmaceuticals (HZNP – Get Report) the Irish drug company, has gone public with a $3 billion offer to acquire fellow drug maker Depomed (DEPO – Get Report) after efforts to negotiate a takeover privately were rebuffed.

The Dublin-based company says it will offer $29.25 of its stock for each Depomed share.

Horizon in March began trying to contact Depomed’s management and board, which “refused to engage in discussions with us and rejected our proposal”, Horizon Chairman and Chief Executive Officer Timothy Walbert said in the statement. They include the acquisitions of Hyperion Therapeutics and the USA rights to the rheumatoid arthritis treatment Vimovo. Plus, given Horizon’s 2014 inversion deal, which moved its nominal headquarters to Ireland, the deal comes with tax savings, too. The deal, if closed, would be accretive immediately to Horizon’s earnings, the company said.

The proposed deal will give Horizon access to Depomed’s newly acquired Nucynta franchise, Gralise, Cambia, Lazanda and Zipsor to enhance growth of the entire portfolio.

“The strategic and financial benefits of our proposal are highly compelling”, Walbert contends, citing “significant” opportunities to ratchet up revenue of the combined company’s 13 marketed products and to cut overlapping costs.

Horizon Pharma shares rose 2.8 percent to $35.75 before the bell on Tuesday. Shares of Depomed remained unchanged at $20.64.