If you have fond memories of The Dating Game, this story might be straight up your alley.
Medicis Pharmaceutical (NYSE: MRX) thought it had a love connection with Inamed (Nasdaq: IMDC). Things seemed hunky-dory until Allergan (NYSE: AGN) showed up on Inamed's doorstep with a bouquet and wooed it away. And to cap it off, now Mentor (NYSE: MNT) wants to embrace Medicis as its own.
Strange as it may seem, this could all wind up working out more or less for the best for all four parties.
Inamed shareholders will collectively get about $400 million more than they stood to gain from the original Medicis deal. That's a good thing. I would have liked to have seen what Inamed, with an existing stable of several high-potential businesses, could have done on its own, but the Allergan offer seems very fair to me.
Allergan, known mostly for eye-care products and Botox, will get a nice aesthetics outfit to expand its facial businesss, and add both a competitive breast implant business and a high-potential bariatric surgery business. That should ultimately help to kick up its already-healthy growth rate.
How about Medicis? Well, it received a going-away prize of $90 million in cash from Inamed -- the breakup fee for spurning its offer in favor of Allergan's. It also attracted an all-stock bid from Mentor, a player in the aesthetic, reconstructive, and urology markets, that was worth about $2.2 billion at the time. The offer led to a nice jump in Medicis' stock after a pretty mixed year to date. What's more, the combined Allergan-Inamed might have to sell marketing rights to an experimental drug called Reloxin to satisfy antitrust concerns; Medicis could end up buying the rights to this fairly promising would-be Botox rival.
Strange days in health care, to be sure. At this point, Allergan and Inamed's wedding looks like a done deal, which should work out for both parties. A Medicis-Mentor deal makes sense as well, and I think the combined company could be appealing from both growth and cost-synergy standpoints.
For now, though, that deal is far from certain. Stay tuned.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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