Genomma announces $834 million proposal to acquire Prestige
Genomma Lab Internacional, S.A.B. de C.V. has announced the submission of a non-binding proposal to acquire all outstanding shares of Prestige Brands Holdings, Inc. common stock for $16.60 per share in cash, for a total value of approximately $834 million.
MEXICO CITY—Genomma Lab Internacional, S.A.B. de C.V. hasannounced the submission of a non-binding proposal to acquire all outstandingshares of Prestige Brands Holdings, Inc. common stock for $16.60 per share incash, for a total value of approximately $834 million, not including Prestige'snet debt. The proposal represents a 23 percent premium over Prestige's closingstock price on Feb. 17 and a 47 percent premium over the three-month historicalaverage of the share price as of Feb. 17.
The proposal was delivered to the Chairman and CEO ofPrestige, Matthew M. Mannelly, in a letter from Rodrigo Herrera Aspra, CEO andChairman of Genomma. Genomma's board unanimously supports the proposal, whichis subject to due diligence, the negotiation of definitive documentation andcustomary corporate and regulatory approvals.
"We believe this is an extremely compelling offer withundeniable strategic and industrial logic, and we are confident that yourstockholders will find it extremely attractive. We believe that bringingtogether our two highly complementary companies would create substantial value.As part of this uniquely compelling combination, Prestige would be wellpositioned to achieve higher growth than it could on a stand-alone basis,"Aspra said in the letter.
Genomma's letter noted that its decision to make theproposal known to Prestige's shareholders was based on "the unique opportunitypresented by our proposal for your shareholders to realize full and immediatevalue." It pointed out that the offer price represents "the highest price that[Prestige's] stock has reached since June 2005."
Aspra added that Genomma is very serious about the proposaland is "prepared to proceed expeditiously and, with your cooperation, believewe can be in position to announce a definitive agreement within two to threeweeks." The company strongly prefers to negotiate a "mutually acceptabletransaction and avoid unnecessary costs," he continued, and is ready at anytime to meet for discussions as they believe "time is of the essence."
"We have a high regard for your operations, management andtalented employees, and we are mindful that you and your management team havecontributed greatly to Prestige's success. Genomma contemplates continuedemployment of Prestige's management and employees following the consummation ofa transaction," he said.
In response to the proposal, Prestige announced that itwould review the letter and respond in due course, though the company notedthat it was "puzzled" by Genomma's approach.
"The 'offer' described in the letter is highly conditional,requiring, among other things, due diligence, significant financing and GenommaLab shareholder approval," Prestige noted in a press release. "Given theextensive conditionality, combined with the absence of detail and the expressedpreference for a negotiated transaction, we are puzzled by Genomma Lab'sdecision to go public without any attempt to first engage in discussions with,or make a proposal to, the board of directors of Prestige Brands. The Companyadvises shareholders that they need not take any action at this time inresponse to Genomma Lab's letter."
Prestige markets and distributes brand-name OTC products ina variety of areas, including cold, allergy, sinus, oral, eye and skin care.Some of its brands include Chloraseptic, Luden's, Dramamine, Beano and ClearEyes.