TPG Buys Par Pharmaceuticals for $1.9B, Spiking PRX Stock

Par Pharmaceuticals (PRX) of Woodcliff Lake, N.J., announced early Monday that that it has agreed to be purchased by private investment firm TPG for $1.9 billion, or $50 per share, which as listed as a 37 percent premium on PRX stock at Friday’s close. With the news, Par’s stock jumped more than 35 percent to be right at the purchase price of $50 per share after hovering around $37 per share for a month.

Par is allowed to consider other proposals until late August before this deal can be finalized. But it is expected to be consummated before the end of the calendar year.

In announcing the agreement, Par CEO Patrick G. LePore said, “We are excited about this transaction as it delivers compelling value to our shareholders. While my focus and that of the Par Board of Directors was on shareholder value, we are very pleased that Par will be acquired by TPG, a leading global private investment firm whose substantial resources and healthcare experience will enable Par to continue to invest in its future long-term growth.”

“We are excited for the opportunity to invest in Par, a leading generic pharmaceutical company that has a long track record of success via its focus on complex products and its strong, diversified product pipeline,” said Todd B. Sisitsky, partner at TPG.  “The company is positioned to benefit from the strong macro trends of a greater focus on cost effective healthcare solutions and the increasing demands from an aging population.  We look forward to partnering with this talented management team to continue developing an attractive platform for expansion.”

The agreement means that a Par stockholder will receive $50 cash from TPG for each share of stock it owns. Only a better proposal in the next month will scuttle this deal.

Hedge funds who have had a stake in PRX have just seen a quick 40-percent return on money in one trading day. For instance, at the end of March, Ralph Whitworth’s Relational Investors had committed nearly $137 million in PRX, while Jacob Gottlieb’s Visium Asset Management was in for $24 million.  PRX was trading at about $40 per share at the end of March.