Aetna Inc. (AET), Humana Inc (HUM), WellCare Health Plans, Inc. (WCG): Whoa! What Just Happened to My Stock?

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An offer you can’t refuse
Suddenly everyone wants to buy Obagi Medical Products, Inc. (NASDAQ:OMPI) , a maker of skin care products. Two weeks ago Valeant Pharmaceuticals Intl Inc (NYSE:VRX) made an offer of $19.75 per share, or $344 million, for the company — a near 30% premium for the stock — but yesterday privately held German firm Merz Pharma Group upped the ante and made a bid to buy the company for $380 million, or $22 a share.

With interest in the company getting frothy now, investors pushed the stock price above the bid, believing Valeant may come back with an improved offer or a third suitor may yet emerge. Obagi generated just $120 million in revenues in 2012, with about half of it coming from its anti-aging cream Nu-Derm, so the bidders are counting on getting more bang for their buck if they’re successful.

Yet the offer by Valeant and acceptance by Obagi surprised and disappointed Merz, and it scolded management in a letter it filed with the SEC. It had been in the middle of negotiations with the skin care products manufacturer at the time, but preferred to negotiate in private. Now that Obagi’s management did an end run around them, they have to take a different route.

Investors haven’t been happy with Obagi’s management, either, with one of its biggest, Voce Capital, calling for the board of directors to be “cleansed” of its conflicts of interest, and it looks like sooner or later they’ll all get their wish of dealing with someone new in the executive suite.

The article Whoa! What Just Happened to My Stock? originally appeared on Fool.com is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group.

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