Alpharma Already Wants More From King (ALO, KG)

Alpharma, Inc. (NYSE: ALO) has already responded to King Pharmaceuticals Inc. (NYSE: KG) regarding the $33.00 per share offer made by King to acquire Alpharma.  As we noted based upon the premium trading to the buyout, it was obvious that many were hoping for a higher buyout price.

Alpharma noted that since the approach was made in July that whileAlpharma is not for sale, it would consider any bona fide proposal thatreflected the fair value of the company.  It states that this was offertoday of $33.00 per share was the third such offer made to the company.

In short, Alpharma’s Board of Directors unanimously state that the$33.00 price is inadequate, does not reflect the inherent value, and itwill not accept an acquisition at that price.

Alpharma apparently offered to provide King with a due diligenceopportunity, but it says that King declined to enter into aconfidentiality agreement to protect Alpharma’s interests.  It alsobelieve there near-term events surrounding EMBEDA that will driveincreased value for shareholders.

Perhaps more importantly, Alpharma said it is willing to entertain aproposal from King that gives a higher value and it remains open todiscussions.

Alpharma has seen an exponential volume surge in trading today.  This $34.00 is actually a multi-year high for the stock, but we’d also not a brief period back in 2000 when shares went north of $40.00 and even went above $60.00 before coming back down to earth.  Unfortunately, many other pharmaceutical stocks aren’t valued at their former highs too…… Stay tuned.

JON C. OGG
AUGUST 22, 2008