Valeant sprints ahead of Endo to secure Salix
pharmafile | March 18, 2015 | News story | Sales and Marketing | Actavis, Canada, Endo, Valeant, Xifaxan, methylnaltrexone, rifaximin, salix
Salix Pharmaceuticals has accepted an improved $11.1 billion takeover swoop from Valeant Pharmaceuticals to beat rival bidder Endo International.
The surprise in this corporate courtship dance was not so much that Quebec-based Valeant had to revise its offer for Salix, but how quickly it happened – prompting an equally speedy departure from Endo.
Valeant says it will now pay around $173 a share for Salix, a maker of gastrointestinal drugs, which is up from its previously agreed offer of $158 a share. This improvement amounts to the bonus of an additional $1 billion for Salix shareholders.
Acting chief executive and board chairman of Salix Tomas D’Alonzo, says: “We are pleased that the enhanced offer price recognises the value of Salix as the leading gastrointestinal speciality pharmaceutical company and delivers to our stockholders all cash consideration in the near future.”
Bowing out gracefully Ireland-based Endo also released a statement regarding the news on Monday: “While we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions. We would like to wish Salix and Valeant continued success as they move forward with their transaction.”
The deal is the largest ever made for Valeant. Last year it lost out in a takeover move on botox-manufacturer Allergan, which was eventually bought by Actavis in November 2014.
North Carolina-based Salix is best known for its irritable bowel syndrome drug Xifaxan (rifaximin), and is expecting to hit new regulatory milestones for Relistor Oral (methylnaltrexone) this year.
Whilst Valeant has won on this occasion it must now do the hard part and come up with over $11 billion in cash. To help finance this the firm will be issuing $1.45 billion in new shares. The New York Times notes that in doing so this will allow the company to pay for the deal without taking on more debt from banks.
Brett Wells
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