BRISTOL, Tenn. (AP) -- Drug developer King Pharmaceuticals Inc. launched its tender offer for rival Alpharma Inc. on Friday, taking its offer directly to shareholders after raising its bid 12 percent to $1.6 billion.
King said its offer of $37 per share will expire Oct. 10. The would-be buyer said it could advocate replacing Alpharma's board members with its own nominees to facilitate the buyout.
King's management reiterated that its offer represents a 54 percent premium over Alpharma's closing price on Aug. 21, the day before public disclosure of the initial buyout offer. That offer had been rejected by Bridgewater, N.J.-based Alpharma, which said it would adopt a shareholder rights plan, also known as a poison pill, to head off a hostile takeover bid.
In a statement Thursday, Alpharma urged shareholders not to take action on King's tender offer until its board makes a formal recommendation within 10 business days following consultation with advisers.
Despite the tough posture assumed by both companies, several analysts agreed Thursday they will likely be forced to negotiate a final deal.
Cowen and Co. analyst Ian Sanderson reaffirmed a "Neutral" rating on Alpharma and said plans to buy the company by the end of 2008 would be difficult without a negotiated deal. Roth Capital Partners analyst Scott Henry also reaffirmed a "Hold" rating on Alpharma, also saying the most likely outcome of the tussling between each company is a negotiated deal.
Shares of King Pharmaceuticals rose 3 cents Friday morning to $10.80, while Alpharma Inc. rose 37 cents to a new high of $37.75.