Medicis Cancels Bid for Inamed

Medicis Pharmaceutical Corp. ended its agreement to acquire Inamed Corp. on Tuesday, allowing rival bidder Allergan Inc. of Irvine to proceed with a $3.42-billion buyout offer.

Santa Barbara-based Inamed, which makes breast implants, paid a termination fee of $90 million to end an agreement reached March 20, Medicis officials said. Allergan, the maker of Botox anti-wrinkle treatment, announced its competing offer Nov. 15.

Medicis dropped its bid, currently valued at $2.83 billion, after Inamed’s third-largest shareholder opposed the purchase and Allergan offered more. Medicis, based in Scottsdale, Ariz., would have had to borrow at least an additional $550 million to match Allergan’s bid, said Amit Hazan, equity research director at SunTrust Robinson Humphrey.

“There’s a very high likelihood the Allergan deal will go through,” Hazan said. “There’s almost no chance shareholders will vote the deal down.”

Inamed Chief Executive Nicholas Teti said in a separate statement that company directors favored the Allergan bid.

“The Inamed board is supportive of the Allergan offer and expects to consider final approval of the Allergan agreement and plan of merger shortly,” he said.

Shares of Inamed fell 57 cents to $87.59. Allergan fell 74 cents to $109.20, and Medicis rose $1.40 to $34.71.

The purchase would give Allergan access to Inamed’s Juvederm wrinkle fillers, which are injected into the face to smooth lines -- a product that the company said would complement Botox. Americans spent about $8.4 billion on 9.2 million cosmetic procedures last year, up 24% since 2000, according to the American Society of Plastic Surgeons.

Inamed also would give Allergan saline breast implants and a surgical device to treat obesity.

SAC Capital, the hedge fund run by Steven Cohen and Inamed’s third-largest shareholder, had said the Medicis offer didn’t adequately value Inamed’s products.