This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mentor Plots Cosmetic Change

The prospective reshaping of the cosmetic-medicine sector had already created plenty of drama in recent days, but now there's a new wrinkle in what has become a four-player saga.

On Sunday, Mentor (MNT) made things a little more interesting, offering $2.2 billion for Medicis Pharmaceutical (MRX). Upon learning of the proposal, Medicis' board members immediately rejected it and reaffirmed their own desire to continue pursuing Inamed (IMDC).

Meanwhile, Inamed, Mentor's main rival in the field of breast implants, is being sought by Allergan (AGN - Get Report), whose bid Inamed's board seemed happy to receive last week .

Allergan and Medicis want Inamed's existing and experimental skin-treatment products. Medicis hopes to expand its skin-care and skin-disease offerings, while Allergan is aiming to fortify its Botox business and to repel challenges from Medicis. Allergan's exchange offer for Inamed began Monday.

Mentor likes Medicis for its skin-treatment business, which it believes has better prospects than its own urological products. Mentor has hired an investment bank to explore options for its urology businesses.

The fight could become even more complicated. After Allergan made its bid for Inamed, analysts began speculating that someone would try to buy Mentor, of Santa Barbara, Calif. That speculation hasn't diminished.

Into the Fray

By early afternoon, shares of Mentor were down $4.89, or 8.7%, to $51.25 as some analysts said its bid was the weakest of all the proposals. More than 1.7 million shares traded, or triple the daily average for the past three months.

Medicis jumped $4.34, or 15.6%, to $32.09, on nearly four times the average daily volume for the past three months.

Mentor offered 0.62 shares for each Medicis share, implying a value of $34.69 a share. That's 25% higher than the Scottsdale, Ariz., company's closing price on Friday.

Joshua H. Levine, Mentor's chief executive, said that even though his stock-swap offer would give Medicis shareholders a 44% stake in the combined company, he would be willing to add cash to the formula to make the proposal more palatable. He didn't offer a precise figure, saying only that the cash component could be "significant or substantial."
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MRX $0.00 0.00%
IMDC $0.00 0.00%
AGN $215.75 -1.40%
AAPL $92.93 -2.00%
FB $116.79 0.05%


Chart of I:DJI
DOW 17,717.86 -112.90 -0.63%
S&P 500 2,068.87 -6.94 -0.33%
NASDAQ 4,788.6690 -16.6220 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs