Genomma Lab Internacional SAB (LABB), the Mexican over-the-counter drug producer seeking to expand in the U.S., retreated after Prestige (PBH) Brands Holdings Inc. rejected the company’s takeover bid.
Shares of the Mexico City-based company fell 1.6 percent to 24.03 pesos at 10:13 a.m. Mexico City time, after earlier dropping as much as 2.9 percent, the biggest intraday decline since March 6. The benchmark IPC index of 35 Mexican companies rose 0.7 percent. Prestige climbed 0.5 percent in U.S. trading to $16.73.
Prestige yesterday turned down Genomma’s offer for $16.60 a share, saying it wasn’t sufficient. The Mexican company’s stock is slumping on bets that Genomma will raise its offer to complete the deal, said Karla Beatriz Pena, an analyst with Corp. Actinver SAB, who recommends selling Genomma shares.
“They’re going to increase the offer, and that’s what’s a bit concerning,” Pena said in a telephone interview from Mexico City. “They’d be leveraging up a bit more.”
Genomma’s debt to earnings before interest, taxes, depreciation and amortization would rise to 4.6 times this year if the deal went through at the current offer price, according to Banco Santander SA.
Oscar Villalobos, the company’s head of finance and administration, didn’t immediately respond to an e-mail and a phone call to his office seeking comment.
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