Prestige Brands Holdings, Inc. (NYSE: PBH) announced today that its
Board of Directors has unanimously rejected Genomma Lab Internacional,
S.A.B. de C.V.'s unsolicited, highly conditional proposal to acquire the
Company for $16.60 per share, as set forth in Genomma Lab's February 21,
2012 public letter. The Prestige Brands Board of Directors has carefully
reviewed the Genomma Lab letter with the assistance of its financial and
legal advisors and, after thorough consideration in accordance with its
fiduciary duties, has determined that the proposed price is inadequate
and the proposal is not in the best interests of Prestige Brands and its
The Board noted the following reasons, among others, in supporting its
Genomma Lab's Proposal Is Inadequate And Not Compelling. The
Genomma Lab 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.
Genomma Lab's Timing Is Opportunistic. Prestige Brands recently
completed its third and largest acquisition of OTC brands in the last
15 months, barely three weeks before Genomma Lab went public with its
proposal. With these transactions now consummated, Prestige Brands is
well on its way to achieving its planned long-term transformation into
a large-scale, diversified OTC company with upside opportunities
arising from its expanded portfolio of core OTC brands. The market had
just begun to recognize the benefits of this successful strategy and
the Company's share price had increased to a new 52-week high when
Genomma Lab rushed to make its unsolicited public proposal.
Genomma Lab's Proposal Lacks Detail And Is Highly Conditional.
The Board believes a credible acquisition proposal must deliver both
compelling value and certainty by including, among other things,
evidence of financial resources sufficient to complete a transaction
in a timely fashion. In addition, any proposal must contain sufficient
detail to demonstrate that it provides market-standard provisions that
assure certainty of completion. The Genomma Lab proposal does not
include debt commitments and is also conditioned on the approval of
its shareholders, due diligence and other unspecified matters.
The Prestige Brands Board is open to considering offers that would
maximize value for stockholders and minimize disruption while the
Company is integrating its recent acquisitions. Accordingly, the Board
has taken steps to resolve the uncertainty created by Genomma Lab's
unsolicited proposal quickly and in the best interests of all
stakeholders, including implementing a short-term shareholder rights
plan and scheduling an earlier annual meeting.
Matthew M. Mannelly, President and CEO of Prestige Brands, said,
"Genomma Lab did not negotiate with us before making its highly
conditional proposal, which was opportunistically timed before our stock
price fully reflected the recent completion of the purchase of brands
from GlaxoSmithKline and other initiatives. We are committed to
maximizing stockholder value, and would be open to compelling, fully
financed offers that provide certainty of closing. Should Genomma Lab
make such an offer, there would be a basis to engage with them."
Sawaya Segalas & Company, Inc., LLC and Morgan Stanley & Co. LLC are
financial advisors to the Company and Kirkland & Ellis LLP is legal
About Prestige Brands Holdings, Inc.
The Company markets and distributes brand name over-the-counter and
household cleaning products throughout the U.S., Canada, and certain
international markets. Core brands include Chloraseptic® sore throat
treatments, Clear Eyes® eye care products, Compound W® wart treatments,
The Doctor's® NightGuard® dental protector, the Little Remedies® and
PediaCare® lines of pediatric over-the-counter products, Efferdent®
denture care products, Luden's® throat drops, Dramamine® motion sickness
treatment, BC® and Goody's® analgesics, Gaviscon® antacid and Beano® gas
Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the
meaning of the federal securities laws that are intended to qualify for
the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. "Forward-looking statements" generally
can be identified by the use of forward-looking terminology such as
"assumptions," "target," "guidance," "outlook," "plans," "projection,"
"may," "will," "would," "expect," "intend," "estimate," "anticipate,"
"believe," "potential," or "continue" (or the negative or other
derivatives of each of these terms) or similar terminology.
Forward-looking statements in this news release include, without
limitation, statements regarding a possible transaction involving the
Company. These statements are based on management's estimates and
assumptions with respect to future events and are believed to be
reasonable, although they are inherently uncertain and difficult to
predict. Actual results could differ materially from those expected as a
result of a variety of factors. A discussion of factors that could cause
results to vary is included in the Company's Annual Report on Form 10-K
and other periodic reports filed with the Securities and Exchange
Prestige Brands Holdings, Inc.
Dan Burch or Bob Marese
Verbinnen & Co
Hugh Burns or Robin Weinberg