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
TheStreet Open House

Mentor Plots Cosmetic Change

Ironically, Mentor's offer for Medicis makes Medicis' offer for Inamed look even better. In March, the Medicis bid was valued at $2.8 billion, or $75 a share, in cash and stock.

After Allergan entered the fray last week, Medicis' stock fell, and the total value of its deal dropped to $69 a share. Now, thanks to Mentor, the Medicis offer is worth just under $76 a share.

That's still not as good as the Allergan offer for Inamed, which is valued at $3.2 billion, or $84 a share in either cash or stock.

Trading in Allergan and Inamed was relatively calm. Allergan, of Irvine, Calif., was down $1.04, or 1%, to $99.21. Inamed, like Mentor based in Santa Barbara, Calif., was off 16 cents to $83.15.

The Latest Player

Some analysts said the Mentor bid was a nice try, but others say it was a doomed proposal. This was a "dead-on-arrival offer," says Amit Hazan, of SunTrust Robinson Humphrey, in a research note. "We are puzzled by both the structure and the timing. The all-stock offer poorly missed the mark."

Hazan cut his rating on Mentor to neutral from buy. "We are now uncomfortable with this management team's ability to use the ensuing proceeds from selling the urology businesses to drive shareholder value," says Hazan. "Indeed, the Medicis offer is indicative of this management's uncertainty with the direction of the business." Hazan doesn't own shares, and SunTrust doesn't have an investment-banking relationship with Mentor.

John Calcagnini of CIBC World Markets says the Mentor bid made strategic sense, giving it access to Medicis' skin care drugs while Mentor continues working on an experimental drug similar to Allergan's Botox. However, Medicis "is intent on buying Inamed and remaining independent," he says.

Calcagnini, who has a sector outperform rating on Mentor, adds that he "would not rule out the possibility" that another company would make a run at Mentor. He doesn't own shares, and his firm doesn't have an investment-banking relationship with Mentor.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs