Note to Depomed shareholders: Let Horizon call its meetings, ISS advises

If Horizon ($HZNP) wants to make any headway in its hostile pursuit of Depomed ($DEPO), it's going to have to call a pair of shareholder meetings. First, though, its target's shareholders have to provide consent for those meetings--something proxy advisory firm ISS recommends they do.

On Monday, ISS published a report advising investors to let Horizon push forth with the meetings, noting that the new bylaws recently adopted by Depomed's board "do not appear to strike an appropriate balance between the board's need for more time to evaluate hostile bids and shareholders' ability to voice their views on strategic and governance decisions."

Horizon has been trying to get the ball rolling on a special meeting since early August, and about a month ago, it voiced its displeasure at how long the process has taken. It accused Depomed of raising "non-substantive procedural hurdles" to setting a meeting date and urged its wannabe acquisition to backdate a supplement to its meeting request to avoid having to call two get-togethers.

Horizon's EVP and general counsel Brian Beeler

Depomed "has offered us and its other shareholders a choice between delay and more delay," Brian Beeler, Horizon's EVP and general counsel, wrote at the time.

ISS, for its part, agrees that "5 to 6 months appears far too long for shareholders to have to wait to opine on potential transactions, much less to express discontent with or attempt to remediate unilateral actions by the board that may adversely impact shareholder rights," it said, as quoted in a statement from Horizon.

Depomed, though, was quick to point out that ISS' advice, for now, ends with the special meeting request.

"The ISS recommendation does not change the fact that we believe Horizon's offer does not reflect the value inherent in Depomed's business nor Depomed's compelling prospects for long-term growth and value creation, and therefore is not in the best interests of shareholders," it said in a statement.

- read Horizon's release
- read Depomed's release

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