September 26, 2008 / 11:28 AM / 10 years ago

UPDATE 1-Alpharma rejects King's offer as inadequate

(Recasts; adds details)

Sept 26 (Reuters) - Alpharma Inc (ALO.N) on Friday rejected King Pharmaceuticals Inc’s KG.N acquisition offer of $37 per share, saying it was “financially inadequate” and not in the best interests of its shareholders.

Alpharma, whose shares closed at $36.58 on Thursday, also urged its shareholders to reject King’s offer and not tender their shares to the King Group. In a regulatory filing with the U.S. Securities and Exchange Commission, Alpharma said it continues to explore all strategic alternatives, including a possible sale of the company for a price in excess of $37 per share.

“Should the King Group choose to participate in this process — now a formal auction process, they would be treated equally with the other participants,” Alpharma wrote in a letter to shareholders included in the filing.

Alpharma also said “the King offer is opportunistically timed” to take advantage of the upcoming regulatory review of its experimental pain drug Embeda.

The trial results of Embeda, which received a priority review status from the U.S. Food and Drug Administration on Sept. 2, are being closely watched as they could affect Alpharma’s value and its negotiating power with potential buyers.

King, which in August offered to buy Alpharma for $33 a share, or $1.4 billion, sweetened its bid earlier this month to $37 a share, or $1.6 billion, and went hostile by taking the offer directly to shareholders.

King shares closed at $9.88 Thursday on the New York Stock Exchange. (Reporting by Esha Dey in Bangalore; Editing by Himani Sarkar)

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