UPDATE 2-Obagi Medical gets higher offer from Merz Pharma
* Merz's bid at an 11 pct premium to Valeant's offer
* Merz says has necessary cash to fund the deal
* Obagi shares rise beyond Merz's offer
By Rod Nickel and Esha Dey
April 2 (Reuters) - Neurological and dermatology drugs maker Merz Pharma Group offered to buy cosmetic products maker Obagi Medical Products Inc for $383.5 million, topping a bid by Canada's Valeant Pharmaceuticals International Inc .
Merz's $22-per-share bid represents a premium of 11 percent to Valeant's offer of $19.75.
Shares of Obagi, which makes skin care products to treat signs of aging, acne and sun damage, were trading above Merz's offer price at $22.91 at midday, suggesting that some investors expect a bidding war.
Analysts ruled out the possibility, saying the offer was fairly valued. "I thought that (Valeant's) $19.75 was also a good offer for Obagi given that it is a company that is growing at about 7 percent, and it is kind of an old product line," Stifel Nicolaus & Co analyst Annabel Samimy said.
Germany-based Merz, which makes prescription and over-the-counter treatments for neurological and metabolic disorders and dermatology, called Obagi a "natural fit" as it would help it diversify its dermatology portfolio and expand its U.S. presence. Continued...