Mentor Corp., a U.S.-based maker of breast implants and other medical devices, said it had proposed a $2.2 billion bid for Medicis Pharmaceutical Co., turning an existing industry takeover battle on its head.
Official word of the proposal came on Sunday from Medicis, a Scottsdale, Arizona-based drug maker embroiled in a bidding war of its own for another breast implant maker, Inamed Corp.
Medicis said its board had received an offer from Mentor --and unanimously rejected it.
In the statement, Medicis said the Mentor bid was “inappropriate in light of the recent trading history of the two companies and the pending stockholder votes” on its now faltering acquisition of Inamed.
But in its own statement, Mentor said its proposed offer was “superior” to Medicis’ Inamed deal and had a better chance of closing quickly.
Under the terms of the proposed deal, Mentor would exchange 0.62 of its own shares for each share of Medicis. That represents an offer price of about $34.81 a share -- a premium of about 25 percent over where Medicis shares closed Friday.
Josh Levine, the president and chief executive of Mentor, also suggested his company was willing to alter the terms of the offer to include some cash component.
“Should the Medicis board want Medicis stockholders to receive a portion of the consideration in cash we would be prepared to move in that direction,” he said.
SON OF INAMED?
That Medicis, which makes drugs to treat skin problems, has become the target of a takeover by Santa Barbara, California-based Mentor is sure to generate feelings of deja vu among some investors.
That is because in March, Medicis put together a very similar deal -- only in reverse -- when it agreed to buy Inamed, a Santa Barbara-based maker of gel-filled breast implants, for $2.8 billion.
But last week, before shareholders of either company had voted on the proposed pact, Allergan Inc., the Irvine, California-based maker of Botox, stepped in and offered $3.2 billion for Inamed -- a premium of nearly 13 percent over the closing price of the company’s shares at the time of the offer.
Since Inamed’s deal with Medicis was subject to shareholder approval, analysts now believe Inamed will simply pull out of the Medicis pact and merge instead with Allergan.
In its statement, Medicis continued to hold out hope that the Inamed deal might still be inked.
“We continue to unanimously recommend,” the company said, “that our stockholders vote in favor of our proposed merger with Inamed as we believe that a combination with Inamed will maximize stockholder value.”
A call to Medicis requesting additional comment was not returned Sunday.
Mentor said Goldman, Sachs & Co. and Citigroup Global Markets Inc. were acting as it financial advisers on the deal and that Wilson Sonsini Goodrich & Rosati P.C. and Dechert LLP, were acting as its legal advisers.
