Germany-based Merz Pharma Group said Monday it has withdrawn a non-binding proposal to acquire all of the outstanding shares of Obagi Medical Products Inc. (OMPI) for $22 per share in cash.
The withdrawal comes after Canada-based Valeant Pharmaceuticals International Inc. (VRX, VRX.TO) recently raised its offer to acquire Obagi for $24.00 per share in cash.
Merz CEO Philip Burchard said that at this level the economics of such a transaction do not meet the company's requirements. Burchard said Merz will continue to seek other acquisition opportunities.
In March, Obagi, a topical aesthetic and therapeutic skin-health systems provider, agreed to be acquired by Valeant for $19.75 per share. The offer came even as Merz was engaged in talks to acquire Obagi.
Not to be left behind, Merz in early April, made a rival bid that was superior, offering $22 for each Obagi share. Valeant then lifted its offer to $24.00 for each Obagi share.
Long Beach, California-based Obagi, with nearly $120 million of revenues in 2012, is known for its dermatology brands such as Obagi Nu-Derm, Condition & Enhance, Obagi-C Rx, ELASTIDerm and CLENZIDerm.
Merz had said that Obagi was an opportunity worth pursuing given its complementary fit with Merz portfolio of injectables.
Obagi is trading at $23.94, down 5.82%, on a volume of 2.3 million shares on the Nasdaq.
Valeant is currently trading at $71.61, down 0.25%, on the NYSE. In Toronto, the stock is trading at C$73.07, up 0.12%.
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