Forest Laboratories Inc. (FRX) plans to complete its $1.2
billion acquisition of Clinical Data Inc. (CLDA) through a
short-form merger, after about 82.8% of the company's shares were
tendered as of Monday's deadline.
Under the short-form merger, the deal can be completed without a
shareholder vote. Forest said it expects to complete the
acquisition within the next several days.
Forest Laboratories had extended the tender offer by a week
after only about 47.6% of Clinical Data's shares outstanding had
been tendered by an April 1 deadline. Terms of the deal required,
among other things, that about 78.2% of such securities be
tendered.
Forest Labs on Tuesday said it plans to convert $50 million of
convertible notes into 6.1 million Clinical Data shares, if needed,
to become owner of more than 90% of its shares outstanding, to
expedite the deal.
Forest in February agreed to buy Clinical Data for $30 a share,
betting that antidepessant Viibryd can help offset the loss of
major products in coming years. It also may pay an additional $6 a
share based on the sales performance of Viibryd.
Consolidation has been a theme of the drug-making and developing
industry of late, as companies have been buying each other up in an
attempt to insulate themselves from revenue lost when patents on
drugs expire, allowing much cheaper generic versions of drugs to
hit the market.
The acquisition is part of Forest's strategy to offset the
looming generic competition for its biggest-selling drugs,
antidepressant Lexapro and Alzheimer's disease drug Namenda, which
provided 85% of product sales in the company's fiscal third quarter
ended Dec. 31. Patents for Lexapro expire next year, and Namenda
loses similar protection in 2015.
Forest, which also sold antidepressant Celexa--which went
generic in 2004--plans to launch Viibryd in the U.S. during the
second half of this year.
Forest Labs shares were up 2 cents at $34.24 in early trading.
The stock is up 21% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com