Depomed has announced that its board has unanimously rejected Horizon Pharma’s third proposal to buy the California-based company.
Following its initial rejected approach in May, Horizon Pharma again failed with an improved proposal in July, which included up to 25% in cash – subject to a reduction in the total price per share.
Depomed, which specialises in pain and central nervous system conditions, notes that the third proposal has a current value below $30 per share, which is less than the $33 per share proposal Horizon previously made.
Dublin-based Horizon has already used several tactics to try and force through the deal – including increasing the stock it owns in Depomed and filing lawsuits challenging Depomed’s legal position.
Horizon’s latest tactic is to put fort seven new directors to serve on Depomed’s board, in the hope that the new shareholders may vote out the current board members at a special meeting. According to Horizon’s chief executive, Timothy Walbert, the new board members would consider his company’s $33-per-share buyout offer.
Walbert says: “Depomed shareholders have a right to consider the highly attractive proposal we have made. However, given the board’s behaviour and entrenchment, we feel strongly that the board as currently constituted does not provide assurance that the interests of Depomed shareholders are being sufficiently taken into account.”
On Horizon’s proposed slate of board members are: Robert Daines, co-director of the Rock Center for Corporate Governance at Stanford Law School; Elizabeth Greetham, a former member of the boards of several pharma companies; Jack Kaye, a former Deloitte audit partner and the current chairman of Keryx Biopharmaceuticals’ audit committee; and four others including device company executives and private equity advisers.