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Obagi Medical shares rise above level of sweetened Valeant bid

Obagi Medical Products (OMPI) is trading higher this morning after agreeing to an increased acquisition offer price from Valeant Pharmaceuticals (VRX). Obagi is a specialty pharmaceutical company that develops, markets and sells topical aesthetic and therapeutic prescription-strength skin care systems and related products in the physician-dispensed market. WHAT'S NEW: Obagi agreed to a revised $24 per share acquisition offer from Valeant, which had previously offered to buy Obagi for $19.75 per share. Obagi's board of directors has approved the amended transaction with Valeant, the company stated. WHAT'S NOTABLE: Following Valeant's initial offer, Merz Pharma Group, a neurological and dermatology drug maker, yesterday offered $22 per share for Obagi. In a note to investors sent yesterday following the offer from Merz, analysts at Cantor said they would not rule out a bidding war for Obagi. Cantor, however, kept its Hold rating on Obagi shares, noting that Valeant has been conservative in the past on its acquisition prices. TODAY'S PRICE ACTION: In mid-morning trading, Obagi is trading above the $24 offer price, rising about 9.5% to $25.06. Meanwhile, Valeant shares are up 12c to $75.49.