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Genomma makes unsolicited bid for Prestige Brands

by Andrew Bulkeley  |  Published February 21, 2012 at 3:23 PM
comet_227x128.jpgMexican consumer products and drug company Genomma Lab Internacional SAB de CV on Tuesday, Feb. 21, unveiled an unsolicited $834 million offer for Prestige Brands Holdings Inc. in hopes of forcing its Irvington, N.Y.-based rival to the negotiating table.

Genomma, of Mexico City, said it would pay $16.60 per share in cash for Prestige, a 22.2% premium to the stock's Monday close. It said it had not yet lined up financing but anticipated no problems in doing so.

"Due to the unique opportunity presented by our proposal for your shareholders to realize full and immediate value, we have decided to make this proposal known to your shareholders. Consequently, we are making this letter public simultaneously with my sending it to you," Genomma CEO Rodrigo Alonso Herrera Aspra wrote in a letter to Prestige CEO Matthew Mannelly that was published along with the proposed offer.

Both Genomma and Prestige have been using acquisitions to build up a medicine cabinet and broom closet full of high-profile brands. Genomma recently picked up Nordiko soap and Alert anti-dandruff shampoos from Colgate-Palmolive Co. for an undisclosed amount. Meanwhile, Prestige in December unveiled a $660 million deal for 17 over-the-counter medications from British drug giant GlaxoSmithKline plc.

That December deal was just one of a number of agreements that likely made Prestige attractive to Genomma. Prestige also struck a $76 million agreement on Dec. 17 for Johnson & Johnson's Dramamine motion sickness treatment and in September agreed to a $190 million deal to buy Blacksmith Brands Inc., including Ludens cough drops, from Boston private equity shop Charlesbank Capital Partners LLC.

Although Genomma has been active in the U.S. since 2008, it has focused primarily on the Spanish-speaking market. The acquisition would quickly broaden both its geographic reach and portfolio.

The Mexican suitor said it would keep Prestige's current management and hoped to announce a binding agreement within the next three weeks if it can quickly conduct due diligence.

In the third quarter ended Dec. 31, Prestige saw sales climb 17.3%, to $106.3 million, leading to a 62.3% jump in net income, to $9.5 million.

Prestige, which markets Comet bathroom cleaner and Clear Eyes eyedrops, couldn't immediately be reached for comment. By early afternoon the company's shares were up 21.7%, or $2.95, to $16.46, suggesting investors don't expect a sweetened approach. Genomma's stock slid 5.1%, or 1.48 pesos, to 27.42 pesos ($2.15).

Genomma is taking legal counsel from Dewey & LeBoeuf LLP.

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Tags: Genomma | Genomma Lab Internacional SAB de CV | health | M&A
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Andrew Bulkeley

Correspondent, Berlin

Andrew Bulkeley has been the Berlin-based European correspondent for The Deal for nearly a decade. Andrew has covered some of Europe's biggest deals, including the marriage and divorce of Daimler and Chrysler, Vodafone's record acquisition of Mannesmann, and the turbulent non-sale of General Motor's Opel. Contact



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