Ireland-based Horizon Pharma said it offered to buy Depomed for about $3 billion, taking its bid hostile after the smaller drugmaker refused to start talks and rejected the proposal first made in May.
Horizon Pharma's offer of $29.25 per Depomed share is unchanged from the price it offered on May 27 and represents a 42 percent premium to the stock's closing price on Monday.
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Horizon Pharma shares rose 2.8 percent to $35.75 before the bell on Tuesday. Trading in Depomed shares were halted.
The deal would nearly double Horizon Pharma's current portfolio of marketed drugs, the company said in a statement on Tuesday.
Depomed currently has five products on the market treating pain, while Horizon Pharma sells four pain treatments.
The equity value of the all-stock offer works out to about $1.74 billion, according to Thomson Reuters calculations based on 59.6 million outstanding Depomed shares.
Depomed shareholders would hold 25 percent of the combined company, Horizon Pharma said, adding that the deal would bring its revenue close to $1 billion.
Citigroup and Jefferies are Horizon Pharma's lead financial advisers.