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MEXICO CITY — Genomma Lab Internacional S.A.B. de C.V. has dropped its plan to acquire Prestige Brands Holdings Inc.
The Mexico City-based pharmaceutical and personal care products company said Thursday that "it has decided to no longer pursue the proposed acquisition" of all outstanding common shares of Prestige for $16.60 per share in cash, or about $834 million.
"Genomma is disappointed with Prestige’s continued rejection of its compelling proposal. Throughout this process Genomma has tried unsuccessfully to engage in discussions with Prestige’s management and offer a fair and adequate price to Prestige’s shareholders," Genomma stated in a press release Thursday.
"The board of directors decided in the absence of such discussions at this time to no longer pursue the proposed acquisition," the company said. "Accordingly, Genomma will proceed to terminate the committed financing it has obtained for the proposed acquisition."
Genomma made its unsolicited offer to acquire Irvington, N.Y.-based Prestige Brands in late February. At the time, the bid represented a premium of 23% over Prestige’s closing stock price on Feb. 17 and a 47% premium over the three-month historical average of its share price as of that date. Prestige Brands confirmed that it received the offer but said it was puzzled why an unsolicited bid was made.
Just weeks later in March, the board of Prestige Brands Holdings Inc. unanimously rejected Genomma’s acquisition bid.
On Thursday, Prestige said in a statement that "it is open to considering offers that would create compelling value for stockholders and offer certainty of closing. That is still the case." However, the company said Genomma’s bid falls short.
"Prestige’s board of directors carefully reviewed Genomma’s proposal with the assistance of its financial and legal advisers and, after thorough consideration in accordance with its fiduciary duties, determined that the proposed price was inadequate and the proposal was not in the best interests of Prestige Brands and its stockholders," Prestige stated. "Over the past three years, Prestige has transformed its business through initiatives that have accelerated growth for its core OTC brands and acquisitions that have bolstered its position in the OTC market. The company remains confident that its proven brand-building strategies will enable it to continue to deliver superior value and looks forward to updating stockholders on its strong performance and ongoing strategy in its upcoming earnings release and presentation on May 17, 2012."
Prestige’s family of brands includes such well-known names as Compound W wart treatments, Chloraseptic sore throat relief and allergy treatment products, New-Skin liquid bandage, Clear Eyes and Murine eye care products, Little Remedies pediatric products, and The Doctor’s NightGuard dental protector, as well as the Efferdent denture cleaner, Effergrip denture adhesive cream, PediaCare cough/cold/allergy/sinus and fever remedy for infants and children, Luden’s throat drops and NasalCrom allergy prevention nasal spray acquired from BlackSmith. The company also holds the Comet and Spic and Span household cleaner brands.
