Prestige Brands Rebuffs Genomma Offer

Prestige Brands (PBH), a US healthcare and cleaning brands company, has rejected an unsolicited bid by Mexico’s Genomma Lab, which last month offered $834m for the company, it says. The PBH board voted to reject Genomma’s $16.60 per share offer, calling the 23% premium “well below comparable transactions.” The board also noted that the implied Ebitda multiple of the offer undervalued PBH at a time when it is still in the process of absorbing previous acquisitions. A spokeswoman at PBH said the offer as directed to the board was not viable, and said that Genomma has not made a tender offer for the shares. Genomma officials did not return calls for comment. The Genomma offer represents an implied 9.5x Ebitda multiple in a best case scenario, according to Janney Capital Markets, which also says the offer likely “undervalues Prestige’s shares.” Despite the rejection, however, the board appeared open to a sweetened offer. “We would be open to compelling, fully financed offers that provide certainty of closing. Should Genomma Lab make such an offer, there would be a basis to engage with them,” PBH says. In late February, Genomma sent a letter to the PBH board suggesting a hostile takeover could ensue should the board reject its bid for the company. Following the offer, PBH adopted a shareholder rights plan, better known as a ‘poison pill’, in an attempt to preempt Genomma’s purchase of shares. PBH owns a number of brands, including Spic And Span, Comet and Dramamine.