) to neutral from buy, after recent news that Medicis Pharmaceutical (MRX
) rebuffed Mentor's offer to buy it for $2.2 billion.
Analyst Amit Hazan says he's puzzled by the structure and timing of the Mentor merger bid, which represents only a 9% premium to where Medicis Pharmaceutical was trading just two weeks ago (Medicis Pharmaceutical was pressured last week when Allergan (AGN
) made a superior bid for Inamed (IMDC
).) At the same time, he notes that Mentor shares were up by about 24% in November; he thinks its all-stock bid for Medicis Pharmaceutical poorly missed the mark. He believes Medicis Pharmaceutical is now squarely focused on acquiring Reloxin (a wrinkle cure similar to Botox) in the upcoming bidding war, and has no interest in a combination with Mentor unless it is Mentor that actually prevails in the Reloxin auction.