Alpharma works to fend off King

King Pharmaceuticals may be all fired up about the possibility of bringing Alpharma into its specialty-drug fold, but the feeling isn't mutual. And Alpharma isn't just saying no. It's working to hold King off. The company has adopted a shareholder rights plan designed to guard against a King takeover. If anyone acquires 15 percent or more of Alpharma's common stock--or launches a tender offer (hint, hint)--the rights will become exercisable.

But the plan isn't designed to head off every acquisition offer, CEO Dean Mitchell said in a statement. Just those whose terms aren't fair and "in the best interests of all Alpharma shareholders."

As you know, King offered $33 a share, or some $1.4 billion for Alpharma, but the company rebuffed that offer. King then went public with its bid in hopes of persuading Alpharma management, saying it was open to negotiation and preferred a friendly takeover. But Alpharma wasn't convinced.

So King filed with the FTC last week, saying it intends to buy a majority share in Alpharma. That's a clear signal of King's intent to pursue a tender offer anyway. Alpharma investors seem sure that King will come back with a higher offer; the stock closed at $37.50 on Friday.

- see Alpharma's release [1]

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