Depomed puts 'poison pill' plan in place as Horizon Pharm takes bid to shareholders

MarketsAssociated Press

Depomed has adopted a "poison pill" plan less than a week after Horizon Pharma went hostile with a $2.1 billion takeover bid.

A poison pill is often used by businesses as a way to try to thwart hostile takeover attempts by making them too expensive.

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Depomed Inc. said in a regulatory filing that it is enacting an agreement that gives one right for each outstanding share to stockholders of record on July 23. Depomed said that the rights "will cause substantial dilution to any person or group that attempts to acquire the company without approval of the board.

The company as rejected Horizon's offer of $29.25 of its stock for each Depomed share.

The rights shouldn't interfere with a merger or other business combination approved by the board because the board can redeem the rights or amend the rights agreement, according to Depomed.

Shares of Depomed added 11 cents to $30.25 in Monday midday trading.