Prestige Brands Takes Poison Pill in Genomma Lab Offer

Prestige Brands Holdings (PBH), a US healthcare and house cleaning products company, has moved to adopt a shareholder rights plan, following last week’s hostile takeover bid by Mexican pharmaceutical marketer Genomma Lab. The PBH board adopted the plan, a strategy better known as a “poison pill,” after Genomma offered to acquire the company’s outstanding shares at $16.60 per share. The aim is to “allow the board of directors adequate time and opportunity to explore, develop and consider any and all alternatives,” the company adds. A poison pill typically dilutes a buyer obtaining a certain percentage of a company, a move that prevents the acquirer from sidestepping a negotiation with a target’s board and dealing directly with shareholders. PBH has not made public the details of its shareholder agreement, but says it will expire after the 2013 annual meeting. Officials at Prestige Brands could not immediately offer additional details. Genomma Lab could not be reached for comment. Last week, Genomma unveiled an offer to shareholders of $834m for the company’s equity, as well as assuming $891m in debt. Overall, the deal implied 9.5x Ebitda, according to calculations by Janney Capital Markets, which deemed the transaction “dubious.”