A proposed
acquisition of Cadence Pharamceuticals (
NASDAQ:CADX,
Stock Forum) by Mallinckrodt plc (
NYSE:MNK,
Stock Forum) has been beset with announcement of investigations by lawyers hoping to represent shareholders.
The deal, which offers $14 per share for Cadence, a premium of 32% of the trialing 30-day volume weighted average of $10.62 per share, is worth an approximate $1.3 billion.
Both parties expect to close the deal by mid-March.
But shareholder rights law firms such as Johnson & Weaver, Bronstein, Gewirtz & Grossman, Bernstein Liebhard and Rifrodsky & Long announced investigations of the deal within hours, citing that it was not in the best interest of investors.
San Diego-based Robbins Arroyo LLP has posted a
news release, pointing out that the $14 offer “represents a premium to shareholders of just 26.5% based on Cadence's closing price on February 10, 2014. This one day premium is significantly below the average one day premium of over 36% for comparable transactions in the last three years. Further, the merger consideration is below the target price of $15.00 set by analysts at Guggenheim Securities, LLC and Wedbush, Inc.”
The law firm says it is “undertaking a fair process to obtain maximum value and adequately compensate Cadence shareholders.”
According to a Cadence news release, “Cadence Pharmaceuticals is a biopharmaceutical company focused on commercializing products principally for use in the hospital setting. The company’s product OFIRMEV (acetaminophen injection) is a proprietary intravenous formulation of acetaminophen for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics and the reduction of fever. Since its introduction, OFIRMEV has experienced strong growth, and in a press release issued January 13, 2014, Cadence reported that it expects net revenues of $110.5 million for OFIRMEV in calendar year 2013 compared to 2012 reported OFIRMEV net product revenues of $50.1 million.”
“The acquisition of Cadence Pharmaceuticals is consistent with our goal of becoming a leading global specialty pharmaceuticals company,” said Mark Trudeau, Chief Executive Officer and President of Mallinckrodt of the deal. “OFIRMEV’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients, and we believe the product will be an outstanding addition to the brands component of Mallinckrodt’s Specialty Pharmaceutical segment. We have been impressed with the strong relationships that Cadence’s commercial organizations have established with customers in the hospital channel and are excited by the opportunity to build on these relationships to expand our platform in this area. We believe Mallinckrodt is well-positioned to further accelerate the trajectory of OFIRMEV and realize the full value of this product in the marketplace.”
Mallinckrodt shares rose $6.88, or 11.6%, on the news.
Cadence jumped $2.93, or 26.47%, to sit at the $14 bid price on the news.