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!

Merz Withdrawal Frees Obagi-Valeant Merger

NEW YORK (TheDeal) -- Merz Pharma Group withdrew its offer for

Obagi Medical Products Inc., ( OMPI ) which is under a $420 million merger agreement with Valeant Pharmaceuticals International Inc., ( VRX ) leaving the Valeant deal presumably to move forward on a fast track.

Acquisitive Valeant, however, pulled and refiled its application for antitrust approval last week, raising some question about whether the Federal Trade Commission wants to probe the transaction further.

Valeant shares slipped 0.4% to $71.80 while Obagi fell 0.1% to $23.95.

Valeant announced a $19.75 per share deal March 20 to acquire Obagi, which has business in the physician-dispensed skin care markets. Merz had failed to make a firm offer before the sale to Valeant was complete and moved in with a $22 per share spoiler bid. Valeant swiftly countered with a $24 per share revised merger.

Merz said Monday it would back down because the price no longer met their economic requirements. Merz said Obagi was an opportunity worth pursuing given its complementary fit with Merz's portfolio of injectables and that it looks forward to exploring other acquisition opportunities that fit its strategy.

Obagi was seen as an opportunity for Germany's Merz to expand its foothold in North America. The company has said it had other acquisition opportunities that could address the same initiative.

Valeant and Obagi refiled applications under the Hart-Scott-Rodino rules after making an initial filing March 25 that would have had an April 9 deadline at the FTC. A filing on the tender offer with the Securities and Exchange Commission on April 5 noted that after discussions with the FTC staff on April 4, Valeant voluntarily withdrew and refiled its application. Obagi said Valeant is of the position that the refiling may facilitate the completion of the FTC's review. The move is a common maneuver by merger parties to reset the clock on the HSR waiting period. Once the waiting period expires, the FTC is obligated to clear the deal or launch a more thorough second request for information.

Since the deal is structured as a tender offer, the HSR initial review period is only 15 days and would expire on April 19. The Obagi tender offer is set to expire April 23. The companies have asked for early termination of the waiting period.

1 of 2

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 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

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