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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Prestige Brands Rejects Unsolicited Proposal From Genomma Lab

Prestige Brands Holdings, Inc. (NYSE: PBH) announced today that its Board of Directors has unanimously rejected Genomma Lab Internacional, S.A.B. de C.V.’s unsolicited, highly conditional proposal to acquire the Company for $16.60 per share, as set forth in Genomma Lab’s February 21, 2012 public letter. The Prestige Brands Board of Directors has carefully reviewed the Genomma Lab letter with the assistance of its financial and legal advisors and, after thorough consideration in accordance with its fiduciary duties, has determined that the proposed price is inadequate and the proposal is not in the best interests of Prestige Brands and its stockholders.

The Board noted the following reasons, among others, in supporting its determinations:

  • Genomma Lab’s Proposal Is Inadequate And Not Compelling. The Genomma Lab proposal is not compelling on key financial metrics. The proposal reflects only a 23% premium to Prestige Brands’ closing price of $13.50 per share on the last trading day prior to the public announcement. This premium is well below comparable transactions, at a time when Prestige Brands’ stock price was increasing to reflect the benefits of its recent acquisitions and on the heels of another strong quarter. In addition, the implied EBITDA multiple is meaningfully lower than comparable transactions and well below the intrinsic value of the Company, especially when taking into account Prestige Brands’ scale, high-quality branded OTC portfolio, significant tax attributes and scarcity value.
  • Genomma Lab’s Timing Is Opportunistic. Prestige Brands recently completed its third and largest acquisition of OTC brands in the last 15 months, barely three weeks before Genomma Lab went public with its proposal. With these transactions now consummated, Prestige Brands is well on its way to achieving its planned long-term transformation into a large-scale, diversified OTC company with upside opportunities arising from its expanded portfolio of core OTC brands. The market had just begun to recognize the benefits of this successful strategy and the Company’s share price had increased to a new 52-week high when Genomma Lab rushed to make its unsolicited public proposal.
  • Genomma Lab’s Proposal Lacks Detail And Is Highly Conditional. The Board believes a credible acquisition proposal must deliver both compelling value and certainty by including, among other things, evidence of financial resources sufficient to complete a transaction in a timely fashion. In addition, any proposal must contain sufficient detail to demonstrate that it provides market-standard provisions that assure certainty of completion. The Genomma Lab proposal does not include debt commitments and is also conditioned on the approval of its shareholders, due diligence and other unspecified matters.

The Prestige Brands Board is open to considering offers that would maximize value for stockholders and minimize disruption while the Company is integrating its recent acquisitions. Accordingly, the Board has taken steps to resolve the uncertainty created by Genomma Lab’s unsolicited proposal quickly and in the best interests of all stakeholders, including implementing a short-term shareholder rights plan and scheduling an earlier annual meeting.

Stock quotes in this article: PBH 

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.
DOW 16,424.85 +162.29 1.00%
S&P 500 1,862.31 +19.33 1.05%
NASDAQ 4,086.2250 +52.0640 1.29%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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