King Seeks To Acquire Alpharma

Amid this summer’s flurry of pharmaceutical sector deal-making, Alpharma, a specialty drug firm based in Bridgewater, N.J., is fending off an unsolicited attempt by King Pharmaceuticals to acquire it for $33.00 per share in cash, or about $1.4 billion.

King, a $2 billion-per-year specialty drugmaker based in Bristol, Tenn., has submitted three takeover proposals to Alpharma since July. In its latest bid, the first to be made public, King states that the combined company would be a leader in the specialty pharmaceutical sector, with particular strength in pain management.

In an exchange of open letters between the two companies’ CEOs, Dean J. Mitchell of Alpharma claims that King’s bid undervalues his company. Although Mitchell asserts that Alpharma is not for sale, he says the firm would seriously consider any proposal that reflects its fair value.

In his letter, King’s Brian A. Markison asks Alpharma’s board to reconsider the offer—and threatens to take the bid directly to shareholders if it does not.

King, with a strategy of licensing or acquiring products in the late stages of development, specializes in neuroscience, hospital, and acute care therapies. Alpharma specializes in pain therapies and has an animal health business.

King’s bid surfaces in the wake of significant deals among major generic drug firms, including a $9 billion bid by Teva Pharmaceutical Industries for Barr Pharmaceuticals in July and Daiichi Sankyo’s $4.6 billion offer for Ranbaxy Laboratories in June. Research-based drug companies are also on the market: Roche is trying to acquire the rest of Genentech, and activist investor Carl C. Icahn is playing a role in bids for both ImClone Systems and Biogen Idec.