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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Forest Labs 'Takes Under' Clinical Data

Updated with current stock price.

NEWTON, Mass. (TheStreet) --Forest Labs (FRX) is buying Clinical Data (CLDA) but the acquisition price -- $30 a share plus a $6-a-share option contingent on robust sales of the antidepressant Viibryd -- is lower than many Clinical Data bulls expected.

Clinical Data closed Friday at $33.90 but was trading trading down 9% to $30.95 Tuesday on the Forest "take under" announcement since the $6 contingent value right for Viibryd will trade at a discount, perhaps around $2 a share.

The Clinical Data story appears to be one in which both the bulls and bears were off the mark. Short sellers targeted Clinical Data because they believed the antidepressant Viibryd was going to be a commercial dud and therefore the company wasn't likely to find a buyer.

Clinical Data shareholders were convinced that Viibryd was a guaranteed blockbuster with peaks sales potential exceeding $2 billion a year. Coupled with the deal-making prowess of chairman R.J. Kirk, the bulls were convinced that Clinical Data would be sold for a price easily exceeding $40 a share if not in the $50-$60-a-share range.

Clinical Data shareholders dissatisfied with the Forest Labs offer may push for another, higher bidder to emerge, but they face a tough fight. Under terms of the deal announced Tuesday, Forest Labs needs 79% of Clinical Data shareholders to agree to tender their shares in order for the acquisition to close. Kirk, his affiliates and the rest of the company's directors, collectively, control 52% of the company's shares and have all agreed to support the Forest Labs deal.

Forest's $30-a-share, all cash offer will cost the company $1.2 billion. In addition, Forest is offering a contingent value right of $6 a share based on future sales of Viibryd, which was approved in January and will be launched commercially in the spring.

--Written by Adam Feuerstein in Boston.



>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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 17,111.10 +4.40 0.03%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.9840 -0.6530 -0.01%

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