Alpharma Accepts Takeover by King

NEW YORK -- Alpharma (ALO) has finally agreed to King Pharmaceuticals' (KG) $1.6 billion cash takeover offer, ending the drugmakers' months-long battle.

On Monday, Bristol, Tenn.-based King said it agreed to pay $37 per share for Alpharma, representing a 54% premium to the Bridgewater, N.J.-based company's closing stock price on Aug. 21, the last trading day before King's initial $33-per-share bid.

After Alpharma rejected the original $1.4 billion offer, King raised its bid and said it would take the offer directly to shareholders.

Both companies' boards have unanimously approved the deal. King's tender offer, which had been scheduled to expire Nov. 21, is now extended to Dec. 19. As of last Friday, 73% of Alpharma shares had been tendered.

King expects the deal to close by the end of the year, adding to adjusted earnings and saving between $50 million and $70 million in costs in the second full year after closing.

The goal of the deal is to expand KIng's pain drug franchise, which consists of the chronic pain treatment Avinza and the muscle relaxant Skelaxin. They made up about half of the company's revenue in 2007.

Alpharma gets most of its revenue from animal-health products, though the bulk of its pharmaceutical sales come from the morphine painkiller Kadian. It also launched the Flector Patch, a pain treatment, in January.

Meanwhile, King is developing the abuse-resistant pain drug Remoxy with partner Pain Therapeutics (PAIN). The majority of a Food and Drug Administration (FDA) advisory panel recently recommended approval of that treatment in an informal vote.