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IRVINGTON, N.Y. — The board of directors of Prestige Brands Holdings Inc. has unanimously rejected an unsolicited bid by Genomma Lab Internacional S.A.B. de C.V. to buy the company.
Prestige Brands said Monday that after a careful examination of Genomma’s offer, its board "has determined that the proposed price is inadequate and the proposal is not in the best interests of Prestige Brands and its stockholders."
Genomma, a Mexico City-based pharmaceutical and personal care products company, in late February made an unsolicited proposal to acquire all outstanding common shares of Prestige Brands for $16.60 per share in cash, or about $834 million. In confirming receipt of an offer letter from Genomma, Prestige Brands said at the time that it was "puzzled" about why Genomma made an unsolicited bid.
On Monday, Prestige Brands said it rejected Genomma’s proposal because it was "inadequate and not compelling," noting that the offer represented only a 23% premium to Prestige stock’s closing price of $13.50 per share on the last trading day prior to the public announcement. "This premium is well-below comparable transactions, at a time when Prestige Brands’ stock price was increasing to reflect the benefits of its recent acquisitions and on the heels of another strong quarter," Prestige stated.
Prestige also called Genomma’s timing for its bid "opportunistic" and noted that Genomma went public with its offer only about three weeks after Prestige completed its third and largest acquisition of over-the-counter brands in the last 15 months. Prestige also said Genomma’s proposal "lacks detail and is highly conditional."
"Genomma Lab did not negotiate with us before making its highly conditional proposal, which was opportunistically timed before our stock price fully reflected the recent completion of the purchase of brands from GlaxoSmithKline and other initiatives," Prestige Brands president and chief executive officer Matthew Mannelly said in a statement. "We are committed to maximizing stockholder value and would be open to compelling, fully financed offers that provide certainty of closing. Should Genomma Lab make such an offer, there would be a basis to engage with them."
Prestige’s roster 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.
