Valeant makes $5.7 billion hostile bid for Cephalon
pharmafile | March 31, 2011 | News story | Research and Development, Sales and Marketing | Cephalon, Valeant
Valeant has made a hostile bid for Cephalon, but analysts believe its offer is too low for the deal to be successful.
Canadian neurology and dermatology specialist Valeant is proposing to buy Cephalon for $73 a share, which would value the US biopharmaceutical company at $5.7 billion.
Valeant has made several private approaches to Cephalon during the past two weeks, one of which included an offer to purchase the company’s non-oncology related assets for $2.8 billion.
Valeant said it had been “disappointed” by Cephalon’s “unwillingness to engage in discussions in a timely manner”.
“We have taken a close look at Cephalon’s business and believe we put forward a very compelling offer for Cephalon’s stockholders,” said J. Michael Pearson, chairman and chief executive of Valeant.
He added: “If our offer does not have the requisite support of Cephalon’s stockholders, we will focus our attention on other opportunities to invest our capital.
“To be clear, we intend to be disciplined on price as we believe we have submitted a full and fair offer for Cephalon based on the information available to us.”
But Jack Albin, chief investment officer at Harris Private Bank, said: “There’s a general awareness this is a steal.
“The deal is as cheap as I’ve seen and public companies rarely trade anything close to that,” he told Bloomberg.
“There could be a higher bid, but it would seem like a reasonable deal at least for Valeant and what they’re looking to do.”
Cephalon has made itself more attractive over the past year and has been hitting the acquisition trail, with a $615 million purchase of specialist generics firm Mepha in April last year.
More recently there was a $225 million deal for oncology specialist Gemin X last week and earlier this week the company made a $231 million offer for ChemGenex Pharmaceuticals.
The haematology-focused Australian biopharmaceutical firm’s lead product candidate, omapro is a treatment of chronic myeloid leukaemia that has completed phase III clinical trials and which it intends to file for FDA approval in the second half of 2011.
ChemGenex’s directors have agreed to support Cephalon’s bid unless a superior offer is made by another company.
Cephalon took a hit in September last year when its chairman and chief executive Frank Baldino Jr. was forced to take a medical leave of absence.
Just months later he died of leukaemia, leaving chief operating officer J Kevin Bushi as temporary head of the company.
Cephalon is advising its shareholders not to take any action in response to Valeant’s offer, saying they “should wait for the board’s response” which will be made next week.
Ben Adams
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