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King raises offer for Alpharma

This article was originally published in Scrip

Executive Summary

King Pharmaceuticals has raised its offer for Alpharma by 12% to $37.00 per share in cash. Last month, Alpharma rejected King's bid of $33.00 per share in cash for all the outstanding Alpharma stock, claiming it significantly undervalued the company (Scrip Online, August 27th, 2008). Brian Markison, King's chairman, president and CEO, said in a letter dated September 11th to Alpharma's president and CEO that King was taking this "enhanced" offer direct to Alpharma stockholders. He also noted that King was prepared to enter into a merger agreement containing a "go-shop" provision, whereby Alpharma would be permitted, after signing, to actively solicit third-party offers during an agreed period of time. Alpharma's board has urged shareholders to take no action and said it would make a recommendation to shareholders within 10 business days following the initiation of the offer. Alpharma shares closed at $37.38 on September 11th, 5% higher than the previous day. Earlier this month Alpharma adopted a limited-duration shareholder rights plan to counter offers for the company (Scrip Online, September 3rd, 2008).

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