Shots were fired again in the Horizon Pharma PLC (NASDAQ: HZNP) and DepoMed Inc. (NASDAQ: DEPO) merger situation. However it is DepoMed this time pushing back against Horizon’s attempted takeover bid. Previously, Horizon made a hostile bid, but DepoMed shareholders were having none of it. In fact, it appears that talks have not progressed much since that point and DepoMed felt the need to fire back with an open letter to Horizon, solidifying its stance.

In early July, Horizon made a hostile takeover bid valued at roughly $29.25 per share of DepoMed, or $1.75 billion, and the transaction would be all stock. Horizon values the entire exchange at about $3 billion and commented that the deal would “immediately and substantially” accretive to the company’s earnings.

According to Horizon, the combined company would have 13 marketed medicines, which would nearly double the company’s current portfolio. Full-year pro forma sales would exceed $950 million, with an adjusted EBITDA of $350 million.

The initial offer in early July represented a premium of 42% from the previous close ($20.64), and DepoMed shareholders would end up with a 25% stake in the newly combined company.

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DepoMed seemingly is upping the ante with its letter, and by the tone of the letter the price just went up. Horizon expressed that it would be willing to increase its $2 billion offer for DepoMed and include a cash component of as much as 25%.

In the open letter, DepoMed CEO Jim Schoeneck detailed:

In our conversation late last week, you stated that Horizon was prepared to increase its proposal and to include a cash component of up to 25%. This was confirmed in an email late Friday night from one of your Board members to our Board Chairman. Yet you still have not made a new proposal. Instead, you have insisted that we need to first make a counter-offer. It does not make any sense to engage with Horizon unless you make a sufficiently compelling and detailed proposal.

He further contested this takeover bid at the end of the letter:

Your willingness to increase your proposal is an obvious recognition that the vast majority of our shareholders do not support what you have proposed. Our Board takes its fiduciary duties seriously and will always be open to any compelling proposal that creates value for its shareholders, but we are prepared and committed to take actions that we deem appropriate to protect our shareholders’ interests, even if it involves protracted litigation and a proxy fight.

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Shares of DepoMed were up about 4.1% to $31.25 early on Friday. The stock has a consensus analyst price target of $33.00 and a 52-week trading range of $11.88 to $33.74.

Horizon shares were down 3.8% at $31.48, in a 52-week range of $9.07 to $39.49. The consensus price target is $42.00.

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