Generic drugmaker Actavis said on Tuesday it would buy Forest Laboratories for about $25 billion in cash and stock, expanding its portfolio of specialty pharmaceuticals for neurological and other disorders.
The deal delivers a major payday to activist investor Carl Icahn, the second-largest shareholder at Forest Labs, who waged two proxy battles and threatened a third to change its leadership and strategy.
Actavis said it would pay the equivalent of $89.48 per share, representing a premium of 25 percent to Forest's closing price on Friday. The offer comprises $26.04 in cash and 0.3306 Actavis share for every Forest share.
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Actavis shares rose nearly 8 percent in premarket trading on Tuesday as investors backed the latest step in the company's strategy of acquiring specialty drugmakers to boost profit margins and sales. (Click here for the latest quote.) Shares of Forest jumped nearly 30 percent. (Click here for the latest quote.)