The board of directors of the specialty pharmaceutical company, Depomed, Inc., has unanimously rejected the specialty pharmaceutical company, Horizon Pharma plc’s, revised proposal to acquire Depomed for approximately $1.8 billion. On August 13, 2015, Horizon revised its previous proposal and set an exchange ratio of 0.95 of Horizon shares for each share of Depomed, and offered to include up to 25% in cash subject to a reduction in the total consideration per share. Depomed noted that the all-stock proposal has a current value below $30 per share, which is less than the $33 per share proposal Horizon previously made, and would represent ownership in the combined company of less than 29%, which Depomed said is “well below” what Depomed would contribute to the combined company.

Prior to Depomed’s rejection of its revised proposal, Horizon Pharma reported that it is amending its preliminary solicitation statement filed on Schedule 14A with the US Securities and Exchange Commission on August 3, 2015 to include a proposal to elect individuals whom Horizon Pharma believes should serve as successor directors on the board of directors of Depomed should Depomed’s current board members be removed by shareholders at a special meeting.

In a statement, Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc, said: “We firmly believe that Depomed shareholders have a right to consider the highly attractive proposal we have made. However, given the board’s behavior and entrenchment, we feel strongly that the board as currently constituted does not provide assurance that the interests of Depomed shareholders are being sufficiently taken into account. Depomed shareholders deserve to have a board that is committed to solely acting in their best interests.”

Horizon Pharma is proposing the following seven independent nominees for election to Depomed’s board of directors: Robert M. Daines, the Pritzker Professor of Law and Business and co-director of the Rock Center for Corporate Governance at Stanford Law School; Elizabeth M. Greetham, a member of the research and advisory group and strategic advisor to the president of The Place2Be, a UK charity which provides mental and emotional support to school children; Jack Kaye, now retired, but former audit partner at Deloitte LLP; Steven A. Lisi, former senior vice president of business and corporate development of Flamel Technologies S.A., a publicly traded specialty pharmaceutical company and co-founder and chairman of MICO Innovations, LLC, a privately held bare metal stent company; Charles M. Fleischman, Advanced Leadership Fellow at the Harvard Advanced Leadership Initiative; Steven J. Shulman, managing partner of Shulman Family Ventures, a private equity firm  and chairman of Accretive Health, Inc., a publicly traded service and technology provider to healthcare providers, and CareCentrix, Inc.; and Ralph H. “Randy” Thurman, a private equity senior advisor and operating executive and a member of the executive investment council of Levitt Equity Partners and senior advisor for BC Partners, both private equity firms.

Source: Depomed and Horizon Pharma