Germany's Merz Pharma Offers to Buy Obagi for $383.5M

merz buy obagi dermatology drugs
NEW YORK -- German drugmaker Merz Pharma Group said Tuesday that it wants to buy dermatology products maker Obagi for about $383.5 million, topping an offer made by Canada's Valeant Pharmaceuticals last month.

Merz said it sent a letter to Obagi Medical Products Inc.'s (OMPI) board offering to buy all of the company's stock for $22 per share. The news sent Obagi's shares up 14.7 percent to $22.61 in premarket trading Tuesday.

Late last month, Valeant Pharmaceuticals International Inc. (VRX) struck a deal with Obagi to pay $19.75 a share, or a total of about $343.7 million, for the company. Merz said Tuesday that it had been in private talks with Obagi before that deal was announced and wasn't aware that it was considering signing a deal with another company so quickly.

Long Beach, Calif.-based Obagi makes skin anesthetics as well as prescription and over-the-counter treatments for wrinkles, acne, sun damage and other skin problems. It posted sales of $120 million last year.

Merz, which makes drugs and other products to treat neurological and clinical dermatological conditions, said the addition of Obagi would be a natural fit for it, expand its U.S. market presence and boost its lineup of dermatology products.

The German company maintained that its offer constitutes a superior proposal and offers a significant premium over Valeant's. The company said it has enough cash on hand to fund the deal and doesn't need additional financing.

Officials for both Obagi and Valeant didn't immediately return emails seeking comment.

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