Dallas, Texas 07/14/2015 (Financialstrend) – Depomed Inc (NASDAQ:DEPO) a company much in the news in recent weeks had another field day on Monday, as it adopted aggressive strategies to fob off new bidders. The company announced on Monday that it was preparing its defenses against hostile takeover. These preventive steps were drawn after Horizon Pharma went public with its offer to buy Depomed. The defensive strategy is is along the line of ‘Poison Pill.’
Poison Pill Plan
Depomed Inc announced via its SEC filing that it was preparing for any such hostile eventually by adopting a strategy which in board room parlance is called as poison pill plan. This will be triggered if an individual or any group were to gain more than 10% stake in the company.
Depomed Inc (NASDAQ:DEPO) is all poised and planned to prevent attempts from peer players such as Horizon Pharma. The defensive mechanism was outlined after Horizon Pharma disclosed that it was keen on acquiring the company, via an open letter dated May 27. The company also claimed last week. that its overtures were turned down by Depomed.Horizon Pharma had proposed that it would acquire shares of Depomed at $29.25 per share, priced at $3 billion. The proposal by Horizon was to generate increased revenues as well as vitalize existing operations leading to increase in earnings for both the companies.
Depomed Inc (NASDAQ:DEPO) has called its plans to counter hostile bids as ‘anti-takeover’ and the new rights it has given itself will ensure that such moves are pre-empted. The changes filed before the SEC will ensure that if any person or group were to acquire the company without approval of the Board, then there would be ‘substantial dilution.’ Any such abortive moves would also be discouraged, even if the acquisition is likely to favor shareholders. The plan will also guard against partial tender offers, coercive tactics to control the company.