Alpharma Not Interested In Being King's Queen

Despite a rejection from Alpharma's board, King Pharmaceuticals has decided to go public with its offer for the specialty pharmaceutical company anyway. 

The Bristol, Tenn.-based pharma announced on Friday that it has offered Alpharma (nyse: ALO - news - people ) a $33.00, all-cash bid that valued the company at $1.4 billion. The offer is a 37.3% premium over Alpharma's closing share price on Thursday. Alpharma, which makes pharmaceuticals for humans and animals, previously rejected King Pharmaceuticals (nyse: KG - news - people ) when contacted in July and early August, according to a letter written by King's chairman, Brian Markison. 

But maybe Alpharma's board was on to something. Investors of the Bridgewater, N.J.-based company pushed its shares up beyond the offer price on Friday morning. Shares of Alpharma were up 42.3%, or $10.17, to $34.21. Alpharma didn't respond to calls for comment. Alpharma develops painkiller Kadian, which had sales of $167.7 million, in 2007. 

Despite the response from the board and the clear response from shareholders, Markison said in his letter that King planned to forge on with the deal anyway. "We continue to prefer to work together with you and your board to complete a negotiated transaction, and we are prepared to commit all necessary resources to do so. If we are unable to negotiate a transaction, we are prepared to take this offer directly to your stockholders," said Markison. 

Jeffries analyst Dave Windley said that he would expect the offer to go higher, likely to the range of $36.00 to $38.00 per share. He added that Endo Pharmaceuticals (nasdaq: ENDP - news - people ) and Cephalon (nasdaq: CEPH - news - people ) may also be interested in acquiring Alpharma, but that King would be the best for the company. 

Shares of King, which specializes in research and development and pain drugs, jumped 7.1%, or 80 cents, to $12.04, on news of the bid. King's key revenue drivers include Avinza, which treats chronic pain, and Skelaxin, a muscle relaxant. The drugs had sales of $653 million and $440 million, respectively in 2007, making up about half of the company's total revenue of $2.14 billion. 

"It would also further diversify King’s business with an additional source of steady cash flow from Alpharma’s Animal Health division, a leading feed additives business," added Markison.