Sector News

Reports: Allergan In Advanced Talks To Acquire Salix Pharmaceuticals

September 24, 2014
Life sciences
(RTTNews.com) – Botox maker Allergan Inc. is in advanced talks to buy Salix Pharmaceuticals Ltd. in order to fend off a $53 billion hostile bid from Canada-based Valeant Pharmaceuticals Inc., according to media reports on Monday. Shares of Salix gained more than 10 percent in extended trades following the media reports.
 
A deal could reportedly be announced later this week or in the next week. However, Raleigh, North Carolina-based Salix Pharma is itself merging with a unit of Italy’sCosmo Pharmaceuticals SpA as part of a tax-inversion deal. Tax inversion is the process of moving a company’s headquarters overseas to benefit from cheaper tax rates compared to higher tax rates in the U.S.
 
Irvine, California-based Allergan’s acquisition of Salix would likely halt a hostile bid for the company from Valeant Pharma and also mean the end of Salix’s deal to acquire Cosmo Technologies. Salix has a market capitalization of $10.18 billion.
 
In April, Valeant along with billionaire investor William Ackman’s hedge fund Pershing Square made a hostile bid to acquire Allergan for $46 billion in cash and stock. Pershing Square is the largest shareholder in Allergan with a 9.7 percent stake. However, Allergan’s board rejected the offer.
 
In May, Valeant sweetened its bid for Allergan to about $53 billion, but the offer was again spurned. Allergan has called Valeant’s business model unsustainable and said that a deal with Valeant would hurt its research and development program.
 
Allergan has agreed to unconditionally call and hold a special meeting of its shareholders on December 18. At the special meeting, Pershing Square plans to rejig the Allergan board and push forward the takeover bid.
 
Meanwhile, pharmaceutical company Actavis plc also reportedly made an offer to acquire Allergan. Terms of the deal were not known, but Allergan is said to have rejected the offer as it was focused on finalizing a deal with Salix.
 
Allergan could pay for the acquisition of Salix with cash and thus, sidestep the need for a shareholder vote on the deal with Valeant Pharmaceuticals and Pershing Square.
 

Related News

September 18, 2020

Eli Lilly, Amgen join forces to scale production of COVID-19 antibody cocktails

Life sciences

Months of fervid research have whittled away most potential options to treat patients with COVID-19, a group of antibody cocktails still hold promise. Eli Lilly believes so strongly in its contender that it’s […]

September 16, 2020

Takeda unveils new Boston R&D manufacturing center for cell therapy pipeline push

Life sciences

Japanese drugmaker Takeda has trumpeted its plan in recent years to cut billions of dollars in costs and pivot around oncology and rare diseases. A key part of that strategy […]

September 15, 2020

AstraZeneca, Oxford restart stalled COVID-19 test as Pfizer ramps up trial numbers for its vaccine

Life sciences

Just under a week after it stopped its key phase 3 pandemic vaccine test, AstraZeneca and the University of Oxford have been given the green light to restart in the […]