Because of your existing merger agreement with Valeant, this proposal is not binding on either Obagi or Merz; however, we expect to be in a position to provide you with a binding offer immediately after we engage in discussions with you as permitted by your existing merger agreement with Valeant.
We view time as being of the essence in this matter. As you know, throughout this entire process we have preferred to work with you privately to consummate a transaction. As a result of your decision to enter into an agreement with Valeant, we are now compelled to pursue a different approach. Given the short time frame remaining for your stockholders to have the opportunity to benefit from our superior proposal, we believe that it is best to provide this letter to you and make it public at the same time.
We look forward to promptly engaging with you. We will be contacting you and your financial and legal advisers promptly to discuss our proposal and next steps to enter into discussions and negotiations with us consistent with your obligations under the existing merger agreement with Valeant.
Chief Executive Officer Merz Pharma GmbH & Co. KGaA
/s/ Hans-Jorg BerglerVP Corporate DevelopmentMerz Pharma GmbH & Co. KGaA
 EBITDA excludes one-time insurance related settlement gain (
) and one-time corporate advisory related expense (
Deutsche Bank Securities Inc. is acting as financial advisor and Weil, Gotshal & Manges LLP is acting as legal counsel to Merz.
About Merz Pharma Group
Merz is involved in the research, development and sale of innovative drugs and medical products for neurological and clinical dermatology indications as well as for aesthetics medicine and metabolic disorders. Memantine, the world's first glutamatergic drug for the treatment of moderate to acute Alzheimer's-induced dementia, is the second most prescribed medication for dementia. Merz offers the first botulinum toxin that is free of complex proteins for treating neurological movement disorders. Another core competency of Merz lies in clinical and aesthetic dermatology. Merz Aesthetics offers a tailored and harmonized portfolio of products for minimally invasive treatments and Merz is an important player in the US aesthetics market with products Radiesse, the neurotoxin Xeomin and the filler Belotero. In the Consumer Products segment, Merz Consumer Care is the leading provider of OTC medication, dietary supplements and skincare products in the German-speaking countries with its well-known tetesept® and Merz Spezial® brands. The Merz Group employs 2,391 people worldwide (prior year: 2,131). The Company generated revenue of
EUR 913 million
in fiscal year 2011/12 (prior year:
EUR 649.6 million
Important Additional Information and Where to Find It
The tender offer for the outstanding shares of Obagi referenced in this press release has not yet commenced. This announcement is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Obagi, nor is it a substitute for the tender offer materials that Merz and its wholly owned subsidiary will file with the U.S. Securities and Exchange Commission (the "SEC") upon commencement of the tender offer. At the time the offer is commenced, Merz and its wholly owned subsidiary will file a Tender Offer Statement on Schedule TO containing an offer to purchase, forms of letters of transmittal and other documents relating to the tender offer, and Obagi will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer. The tender offer materials and the Solicitation/Recommendation Statement will contain important information. Holders of shares of Obagi are urged to read these documents when they become available because they will contain important information that holders of Obagi securities should consider before making any decision regarding tendering their securities. The offer to purchase, the related letter of transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all holders of shares of Obagi at no expense to them. The tender offer materials and the Solicitation/Recommendation Statement will be made available for free at the SEC's web site at
. Free copies of these documents may also be obtained by mailing a request to the information agent for the tender offer, MacKenzie Partners, Inc., 105 Madison Avenue,
New York, New York
10016; or by calling toll free at 1-800-322-2885.
Corporate Communications+ 49-69-15 03-889
Merz North America
– Corporate Communications 336-217-2423
, Wilkinson Brimmer Katcher212 355 4449
MacKenzie Partners, Inc.212 929 5802 / 212 929 5877
SOURCE Merz Pharma Group