IRVINGTON, N.Y. — Prestige Brands Holdings Inc. confirmed that it has received an offer to be bought out by Genomma Lab Internacional S.A.B. de C.V. but expressed bewilderment about why an unsolicited bid was made.
Prestige Brands said Tuesday that Genomma, a Mexico City-based pharmaceutical and personal care products company, has offered to acquire all outstanding common shares of Prestige for $16.60 per share in cash, or about $834 million.
In a letter to Prestige Brands chairman and chief executive officer Matthew Mannelly, Genomma said the bid represents 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. Genomma also noted that its board unanimously supports the proposal.
Prestige Brands stated Tuesday that in consultation with its independent financial and legal advisers, its board will review the Genomma letter and respond in due course.
"The ‘offer’ described in the letter is highly conditional, requiring, among other things, due diligence, significant financing and Genomma Lab shareholder approval," Prestige Brands said in a press release confirming receipt of Genomma’s proposal. "Given the extensive conditionality, combined with the absence of detail and the expressed preference for a negotiated transaction, we are puzzled by Genomma Lab’s decision to go public without any attempt to first engage in discussions with, or make a proposal to, the board of directors of Prestige Brands. The company advises shareholders that they need not take any action at this time in response to Genomma Lab’s letter."
Genomma’s letter to Prestige Brands, which was made public by the company, doesn’t explain why it made an unsolicited offer to acquire Prestige.
"Our goal is to work with you to agree to a negotiated transaction. However, due to the unique opportunity presented by our proposal for your shareholders to realize full and immediate value, we have decided to make this proposal known to your shareholders. Consequently, we are making this letter public simultaneously with my sending it to you," Genomma stated in the letter to Mannelly.
Genomma described itself as one of the fastest-growing pharmaceutical and personal care products companies in Latin America, with an increasing international presence.
"We believe this is an extremely compelling offer with undeniable strategic and industrial logic, and we are confident that your stockholders will find it extremely attractive," the letter continued. "We believe that bringing together our two highly complementary companies would create substantial value. As part of this uniquely compelling combination, Prestige would be well-positioned to achieve higher growth than it could on a stand-alone basis."
Prestige Brands markets and distributes a range of well-known over-the-counter and household brands in the United States, Canada and some international markets. Its roster of brands includes Chloraseptic sore throat treatments, Clear Eyes eye care products, Compound W wart treatments, The Doctor’s NightGuard dental protector, the Little Remedies and PediaCare® lines of children’s OTC products, Efferdent denture care products, Luden’s throat drops, Dramamine motion sickness treatment, BC and Goody’s analgesics, Gaviscon antacid and Beano gas treatment.
