Fight for Salix gets hot; Valeant ups bid to about $11.11B
NEW YORK (AP) — Valeant turned up the heat in its bidding fight for Salix Pharmaceuticals on Monday, raising its offer to about $11.11 billion in cash.
The Canadian drugmaker now says it will pay $173 per Salix share, a 2 percent premium over Friday's closing price of $169.40. The companies put the deal's enterprise value at about $15.8 billion.
"We are committed to getting this deal done," Valeant Chairman and CEO J. Michael Pearson said in a printed statement.
The bigger bid comes after an offer last week from specialty drugmaker Endo International PLC, which said it would pay 11 percent more for Salix than Valeant. Endo, based in Dublin, Ireland, valued its cash-and-stock offer at $175 per Salix share, or roughly $11.17 billion.
Valeant's prior offer was about $10 billion in cash, or $158 per share. With debt, that deal was valued at $14.5 billion.
Salix, based in Raleigh, North Carolina, specializes in medicines for gastrointestinal disorders, including Pepcid and Zegerid for ulcers and gastroesophageal reflux, and Relistor for constipation caused by opioid drugs. It's developing two more drugs for opioid-induced constipation, one for rheumatoid arthritis and a drug called rifaximin for Crohn's disease and preventing complications of liver cirrhosis. Rifaximin is currently under review for a third use, treating irritable bowel syndrome. Last year, Salix reported total revenue of $1.13 billion and a net loss of $415 million.
Valeant specializes in dermatology, eye health and neurology. It focuses on frequent acquisitions rather than internal drug development. Last year it had revenue of $8.3 billion and net income of $912 million.
Landing Salix would be a redemption for Valeant, which was snubbed in its pursuit of Botox-maker Allergan last year. Valeant is looking to grow and in 2013, it acquired the contact lens-maker Bausch + Lomb for $8.7 billion.
Shares of Salix Pharmaceuticals Ltd. climbed $4.54, or 2.7 percent, to $173.94 in premarket trading Monday. Valeant Pharmaceuticals International Inc.'s stock added $2.37 to $199.80.