Obagi Medical gets higher offer from Merz Pharma
(Reuters) - Neurological and dermatology drugs maker Merz Pharma Group offered to buy cosmetic products maker Obagi Medical Products Inc OMPI.O for $383.5 million, topping a bid by Canada's Valeant Pharmaceuticals International Inc (VRX.TO: Quote) (VRX.N: Quote).
Merz's $22 per share bid represents a premium of 11 percent to Valeant's offer of $19.75.
Obagi shares were trading above Merz's offer price at $22.90 in premarket trade, suggesting that some investors expect a bidding war.
Merz was engaged in discussions with Obagi regarding a potential transaction, when Obagi and Valeant announced their deal on March 20, the Germany-based privately held company said.
Valeant, Canada's largest publicly-traded drugmaker, has been building up its dermatology and aesthetics portfolio in the United States over the past year. Obagi makes skin care products to treat signs of aging, acne and sun damage.
Merz said it had the necessary cash to fund the deal and would not require additional due diligence. It is also prepared to move forward immediately to complete the deal.
Merz, which makes prescription and over-the-counter treatments for neurological and metabolic disorders and dermatology, called Obagi a "natural fit" for the company, as the deal would expand its U.S. presence and help diversify its dermatology portfolio.
Shares of Obagi were up 16 percent in premarket trade.
(Reporting by Esha Dey in Bangalore; Editing by Saumyadeb Chakrabarty)
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