Merz Pharma drops out of race for Obagi Medical
(Reuters) - Germany's Merz Pharma Group withdrew its offer for U.S. cosmetic products maker Obagi Medical Products Inc OMPI.O, after rival bidder Canada's Valeant Pharmaceuticals International Inc (VRX.TO) raised its offer last week.
Merz offered $22 per share on April 2. However, Valeant raised its bid the next day to $24 from its original offer of $19.75 in March.
Obagi shares were down 6 percent at $23.99 in premarket trading on Monday. The shares, which closed at $25.42 on Friday, had jumped above Valeant's higher offer in anticipation of a bidding war.
"Merz is a disciplined buyer and at this level the economics of such a transaction do not meet our requirements," Merz CEO Philip Burchard said in a statement.
Obagi makes skincare products to treat signs of aging, acne and sun damage, while Merz makes prescription and over-the-counter treatments for neurological and metabolic disorders and dermatology.
The market for cosmetics products was hit by hard times during the recession as consumers cut back on discretionary spending, but physicians are seeing patients return as the economy stabilizes, spurring multiple deals in the sector.
Valeant, Canada's largest publicly traded drugmaker, has been building up its dermatology and aesthetics portfolio in the United States over the past year.
It acquired Medicis Pharmaceuticals in December, adding Botox competitor Dysport and other skincare drugs to its line-up.
Allergan Inc (AGN.N), the maker of anti-wrinkle drug Botox, acquired privately held SkinMedica for its topical skincare products in November.
(Reporting by Esha Dey in Bangalore; Editing by Maju Samuel)