If you're an Amag Pharmaceuticals shareholder disgusted by the idea of a merger with Allos Therapeutics, what do you do? If you're hedge fund MSMB Capital Management, you offer $378 million to buy the company instead. The $18-a-share offer is a 25% premium to yesterday's close--and the price could go up, MSMB said in announcing its bid.
Amag makes an anemia drug, Feraheme, that has been suffering ever since Medicare changed its reimbursement guidelines for drug use in dialysis clinics. Sales for the second quarter dropped by 20%. The company's way-forward strategy--an all-stock merger with Colorado-based Allos, which makes a blood cancer treatment--hasn't met with a lot of approval on Wall Street.
"The offer from MSMB provides the company's stockholders a viable alternative to this poorly viewed transaction," the hedge fund's statement said (as quoted by Bloomberg). In an interview with Bloomberg, MSMB Chief Investment Officer Martin Shkreli added, "MSMB is a long-term investor in Amag and believes that the management's current strategy does not protect the interests of Amag's stockholders or ensure Amag's long-term viability." The company issued a statement saying its board would "carefully consider and evaluate" the MSMB proposal.
- see Amag's statement
- check out the release from MSMB
- read the Bloomberg piece