Says the proposal is not in the best interests of its shareholders
ISTA Pharmaceuticals, a Californian manufacturer of ophthalmic pharmaceuticals and allergy drugs, has rejected a hostile takeover bid from Valeant Pharmaceuticals.
Mississauga, Ontario, Canada-based Valeant, which has also this week acquired Sanofi’s Dermik business, has offered $6.50 per share in cash, valuing the firm at approximately US$314m and it would take on $13m of debt.
This represents a premium of approximately 68% over ISTA's closing price on 15 December. Valeant's board of directors unanimously supports the proposal.
Valeant approached ISTA on 5 October, but ISTA refused to enter into a confidentiality agreement and rejected Valeant’s proposal.
Michael Pearson, chief executive of Valeant said: ‘We would be willing to consider improving our offer price if we were allowed to conduct due diligence and found additional value.’
He added that ISTA stockholders should not be denied the opportunity to ‘determine for themselves whether their board and management should engage with Valeant in a meaningful and productive dialogue regarding our proposal’.
Valeant says the offer will only remain in effect until 31 2012.
ISTA’s president and chief executive Vicente Anido said the offer was ‘grossly inadequate’ and ‘not in the best interest of shareholders’. He added that it also ‘significantly undervalues’ ISTA.
While recognising that volatile markets since July 2011 have put pressure on ISTA's stock price as well as the stock prices of other specialist pharmaceutical companies, he said ISTA is now ending a pivotal year, which featured the important conversion from Xibrom to Bromday and strong market share growth for Bepreve.
In addition, he said ISTA has continued to strengthen and advance the business while also achieving important milestones in its pipeline to drive future growth.