Forest Labs (FRX) to be Taken Over by Actavis for 25B
Shares of Forest Laboratories Inc. (FRX) were up +25.24 or +35.36 percent to $96.63 per share in pre-market trading on Tuesday, after news that Actavis Plc (ACT) had agreed to purchase the company for $25 billion. Forest Laboratories stock closed at $71.39, up +1.05 or +1.49 percent in Fridayâ s regular trading session, giving the company a valuation of $19.3 billion.
Actavis stock was up +30.32 or +15.8 percent to $222.22 per share in this morningÃƒÂ¢ s premarket trading. The stock closed at $191.88, up +0.25 or +0.13 percent in FridayÃƒÂ¢ s regular session.
New York City based Forest Laboratories Inc. was founded in 1954 and is a major pharmaceutical company best known for its drug for the treatment of AlzheimerÃƒÂ¢ s disease, Namenda and Namenda XR. The company produces Namenda along with Lexapro, an antidepressant developed with Danish pharmaceutical company Lundbeck, in its plant in Dublin, Ireland. Dublin, Ireland based Actavis is the second largest maker of generic drugs in the world and has spent over $14 billion purchasing companies over the past few years. Formerly known as Watson Pharmaceuticals Inc. and based in Switzerland, the companyÃƒÂ¢ s 2013 purchase of Warner Chilcott Plc gave the company an Irish corporate address and its tax rate lowered from 37 percent to 17 percent. The deal, which was just announced, would have Actavis pay Forest Labs shareholders $26.04 in cash plus a portion of an Actavis share for each Forest Labs share. The total price per share would come out to $89.48 per Forest Lab share and represents a 25 percent premium over Forest Labs stock closing price on Friday, February 14th. The combined company will span generic and branded drugs and according to the latest news, will be headed by Actavis Chief Executive Paul Bisaro. Forest Laboratories Chief Executive Brent Saunders will be placed on the new companyÃƒÂ¢ s board, along with three members of Forest LaboratoriesÃƒÂ¢ board. Saunders, a former CEO for Bausch & Lomb Inc, took over as ForestÃƒÂ¢ s CEO in September. One of SaundersÃƒÂ¢ first moves with the company was the takeover of Aptalis Pharma Inc. for $2.9 billion, adding AptalisÃƒÂ¢ treatments for cystic fibrosis and gastrointestinal ailments to ForestÃƒÂ¢ s list of pharmaceuticals. The combined company could have revenue of as much as $15 billion by 2015, according to estimates. Investors are certainly approving, with both stocks up sharply in premarket trading. The big winner in this deal however is Carl Icahn. Icahn Associates LLC, a privately held firm holds 11.7 percent of Forest Laboratories shares. Forest Laboratories shares are already trading notably higher than the $89.48 price, in part due to Actavis stock price, which is already up almost +16 percent. The latest information is that investor rights law firm Tripp Levy PLLC is seeking a higher price and additional information for Forest Shareholders. An investigation is currently underway to determine if there were any breaches of fiduciary duty or violations of state law by the Forest Board of Directors and senior management in acting in the shareholdersÃƒÂ¢ best interest. Other News About Forest Laboratories Forest Laboratories to Discontinue NAMENDA Tablets, Focus on Once-Daily NAMENDA XR
Company will discontinue Namenda tablets on August 15, 2014. Forest Labs completes $2.9B purchase of Aptalis
Aptalis will provide $700 million in additional revenue for Forest Labs. Other Stocks in the News Coca-Cola profit falls 8 pct
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Published on Feb 18, 2014
By Jay Hawk