We warned you, Depomed: Horizon pushes down hostile path

Horizon CEO Timothy Walbert

Horizon Pharma ($HZNP) is done playing nice in its quest to nab Depomed ($DEPO). Now that its target has dismissed its updated buyout bid, it's charging full-force into hostile pursuit.

On Monday, the Irish drugmaker said it had written to Depomed to get the ball rolling on requesting a special shareholders meeting. It also filed a lawsuit in California challenging the legality of Depomed's poison pill and some of the bylaw amendments it announced last month.

"We have repeatedly sought to engage in good faith with Depomed's management team and board towards a consensual agreement to combine our two companies," Horizon CEO Timothy Walbert said in a statement. "However, as a result of the improper efforts of Depomed's management team and board to entrench themselves, we have taken definitive steps to empower Depomed's shareholders to act in their own best financial interests."

Depomed, on the other hand, doesn't see anything wrong with the takeover defenses it put up in July. "The actions taken by Depomed's board of directors represent a reasonable and customary exercise of the board's fiduciary duties and are intended to protect the ability for all Depomed shareholders to realize the long-term value of their investment in the company," it said in a statement.

Meanwhile, it's filing a complaint in the same court as Horizon, claiming--among other things--that Horizon's bid is "predicated on the improper and unlawful use of highly confidential and proprietary information" relating to Nucynta, the pain franchise it nabbed earlier this year from Johnson & Johnson ($JNJ). It wants an injunction that'll block Horizon from continuing to use the information--and stop it from making more "false and misleading statements."

Tensions have been building between the two companies since Horizon first took its intentions public. Horizon--which started out offering $29.25 per Depomed share--later hiked its proposal to $33 per share in a bid for some more polite deal talk, but last week, Depomed waved off the offer, arguing that it took "advantage of a temporary decrease in Depomed's stock price."

Horizon, though, has said more than once that it wouldn't wait around for Depomed's blessing. "Horizon remains committed to an acquisition of Depomed and we are prepared to consider all paths necessary to complete the transaction," Walbert said in a statement last month.

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

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