Par Pharmaceuticals Companies Inc.
) recently announced that the "go shop" period under the terms of
the earlier announced merger agreement, between the company and an
affiliate of leading global private equity firm TPG Capitals, has
We note, on July 14, 2012, Par Pharma had entered into an
agreement with TPG Capitals, whereby the latter proposed to acquire
Par Pharma for $1.9 billion.
According to the terms of the agreement, TPG offered Par Pharma
shareholders $50 in cash for each share of Par Pharma's common
stock. The offer price represented a premium of approximately 37%
over the July 13, 2012 closing share price, which was the last full
trading day before the announcement.
However, the agreement also permitted Par Pharma's Board of
Directors to search for alternative superior proposals until August
24, 2012, from other bidders.
During this period Par Pharma actively took part in search for
proposals of potential suitors, whereby 3 out of 42 interested
parties entered into confidentiality agreements with the
Regardless of Par Pharma's solicitation efforts, the company
failed to acknowledge any alternative acquisition proposal before
the due date. The company also mentioned that early termination of
the waiting period was granted by the Federal Trade Commission on
August 24, 2012, under the Hart-Scott-Rodino Act.
Par Pharma has hence fixed a special meeting with the
stakeholders of the company on September 27, 2012, for the adoption
of the merger agreement.
We note that merger and acquisition activities are ramping up in
the pharma/biotech sector. Over the last few weeks, major deals
have been announced including
) acquisition of Amylin Pharmaceuticals Inc. and
) deal with Human Genome Sciences Inc.
We currently have a Neutral recommendation on Par Pharma. The
stock carries a Zacks #3 Rank (Hold rating) in the short run.
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