And so it ends, not with a bang, but a whimper.
On Monday, Germany's Merz Pharma gave up on its attempt to buy Obagi Medical Products (UNKNOWN:OMPI.DL) away from initial bidder Valeant Pharmaceuticals (NYSE:BHC). While lamenting that "Obagi was an opportunity worth pursuing given its complementary fit with Merz's portfolio of injectables," Merz CEO Philip Burchard assured investors that "Merz is a disciplined buyer, and at this level, the economics of such a transaction do not meet our requirements."
Valeant, apparently, had other requirements and is expected to proceed with the acquisition of Obagi Medical at a purchase price of roughly $420 million, or 3.7 times Obagi's trailing revenues. The good news: At this price, Valeant is still getting Obagi for a discount to Valeant's own P/S ratio of 6.2.
The better news: Investors still think that's a good enough deal to support and bid up Valeant shares by 0.5% in Monday trading, to close at $72.12. (Obagi shares, on the other hand, slumped 5.7%, as the prospects for a continued bidding war evaporated. Obagi shares closed at $23.98.)
Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.