Biotech and Pharma

Horizon Pharma goes hostile with $3 bln offer for Depomed

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.

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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.