Alpharma continues to reject King's offer, enters into confidentiality agreements with other parties

By Lisa Kerner

Charlotte, N.C., Sept. 26 - Alpharma Inc.'s board of directors once again urged its shareholders not to tender their shares in King Pharmaceuticals, Inc.'s offer.

The board called the $37-per-share offer "financially inadequate."

King began the offer on Sept. 12 through its wholly owned subsidiary, Albert Acquisition Corp., an Alpharma news release said. The offer is set to end at 5 p.m. ET on Oct. 10.

It was previously reported that King, a Bristol, Tenn., pharmaceutical company, chose to take its $1.6 million offer directly to Alpharma shareholders following Alpharma's rejection and said it is also prepared to begin a consent solicitation to replace Alpharma's board of directors if necessary.

Alpharma said it is continuing to pursue the process of exploring strategic alternatives, which includes a possible sale of the company to King, or another party, at a price in excess of $37 per share.

The company has received expressions of interest from numerous parties, said Alpharma president and chief executive officer Dean Mitchell.

"We have entered into confidentiality agreements with a number of these parties who have now begun their due diligence review, and have already received a written preliminary indication of interest for a business combination from a party that includes a per share price in excess of the King offer," Mitchell said in the release.

The company, however, gave no assurance that the process of exploring alternatives will result in a transaction.

In a Sept. 26 letter to shareholders, Mitchell and board chairman Peter G. Tombros invited King to be part of the auction process.

Mitchell and Tombros told shareholders they believe King's offer is "opportunistically timed to take advantage of the upcoming review by the U.S. Food and Drug Administration, and potential approval, of Embeda."

King's threat to remove and replace Alpharma's board was called "self-serving and disruptive to Alpharma's process to explore strategic alternatives," the letter said.

The letter also cited a total of 13 conditions on which the King offer is predicated, making completion of the offer uncertain.

In a statement released late Friday, King said its offer, which is not conditioned on financing, "is the only outstanding offer for Alpharma and would provide its shareholders with a 67% premium over Alpharma's closing price on Aug. 4, the date of our initial written offer."

"Given the uncertainty in the financial markets, we believe it is in the best interests of Alpharma stockholders to consummate our transaction as quickly as possible," a King news release said.

Alpharma is a Bridgewater, N.J.-based specialty pharmaceutical and animal health company.

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