(Adds analyst comments, background, closing stock price)
CHICAGO May 29 Bradley Pharmaceuticals Inc.
BDY.N has received a $360 million buyout offer from an
investor group led by Chief Executive Daniel Glassman, the
company said on Tuesday.
The offer of $21.50 for each common and Class B share
represents a premium of 16.6 percent over the Friday closing
price on the New York Stock Exchange.
Shares of the specialty pharmaceutical company closed up
21.2 percent at $22.35 Tuesday, topping the offer, a situation
that often indicates investors expect a better bid to emerge.
"Based on the initial stock reaction, investors appear to
be holding out for the possibility of an eventual higher
offer," Wachovia analyst Michael Tong, who has a "market
perform" rating on Bradley, said in a note to clients.
However, Tong thought a competing bid was unlikely due to a
lack of obvious financial or strategic buyers, and said the
management-led offer represented a fair value for the company.
The Glassmans control about 22 percent of the voting power
through their combined holdings of common and Class B shares,
Glassman, a company founder, owns most of Bradley's Class B
shares and about 5.63 percent of the common stock, according to
Board member Iris Glassman, his wife and co-founder, owns
about 6.68 percent of the common shares, and their son Bradley
Glassman, a company senior vice president, owns about 1.44
The Fairfield, New Jersey-based company said its board had
formed a special committee of independent directors to consider
strategic alternatives, including Glassman's proposal.
Glassman, in a letter to the committee, said he expects to
reinvest a substantial portion of his equity ownership through
the transaction and is in discussions with One Equity Partners
LLC to provide new cash equity and Credit Suisse Securities
(USA) LLC to underwrite debt financing.
Glassman said he would remain CEO following the deal and
expects senior management to continue to work with him.
In October, Bradley Pharmaceuticals said it settled a
dispute with large dissident shareholder Costa Brava
Partnership, agreeing to separate its chairman and chief
executive posts and naming new directors to its board.
(Additional reporting by Sayantani Ghosh in Bangalore)