Prestige Brands rejects hostile bid from Mexican drugmaker

US OTC and household products company Prestige Brands Holdings (NYSE: PBH) has turned down an $834 million - or $16.60 per share - bid by Mexican drugmaker Genomma Lab Internacional, saying it is inadequate and not in the best interest of the company or its shareholders.

The Prestige Brands board noted the following reasons, among others, in supporting its determinations:

• Genomma Lab’s proposal is not compelling on key financial metrics. The proposal reflects only a 23% premium to Prestige Brands’ closing price of $13.50 per share on the last trading day prior to the public announcement. This premium is well below comparable transactions, at a time when Prestige Brands’ stock price was increasing to reflect the benefits of its recent acquisitions and on the heels of another strong quarter. In addition, the implied EBITDA multiple is meaningfully lower than comparable transactions and well below the intrinsic value of the Company, especially when taking into account Prestige Brands’ scale, high-quality branded OTC portfolio, significant tax attributes and scarcity value.