Shares of Bradley Pharmaceuticals soared 24% before closing up 21% at $22.35 Tuesday on news that a group of investors, led by President and CEO Daniel Glassman, has bid $360 million to buy out the company. The group offered $21.50 in cash per share, representing a 17% premium to the shares' Friday close. Glassman owns 2.1 million shares, or 12.4% of the company. The other members of the group are Glassman's wife and company co-founder Iris Glassman and their son, SVP Bradley Glassman. Glassman plans to continue as CEO. He will finance the deal through roll-over equity "provided by myself and others," new cash equity -- possibly from One Equity Partners LLC -- and debt financing. "I am prepared to move very quickly to negotiate a transaction," Glassman said in a letter to the board, which has convened a special committee of independent directors to consider the proposal. Raymond James analyst Michael Krensavage believes Glassman's offer is low in view of the company's portfolio, which includes three patented drugs (Solaraze, Elestrin, and Veregen) that alone are worth $20 per share. Krensavage puts a fair value for the whole company in the $27-$34 range. Investors bid up the company's shares past Glassman's offer on Tuesday, suggesting the market expects a higher bid.
Sources: Press release, MarketWatch, Forbes, Reuters, Wall Street Journal
Commentary: The Investable Universe of Aesthetic Healthcare Stocks • Biotech Buyout Frenzy Continues
Stocks/ETFs to watch: Bradley Pharmaceuticals, Inc. (BDY). Competitors: Medicis Pharmaceutical Corp. (MRX), Sciele Pharma Inc. (SCRX). ETFs: Pharmaceutical HOLDRs (PPH), iShares Dow Jones US Pharmaceuticals (IHE)
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