Sector News

Valeant closing in on $160-per-share Salix deal: Reuters

February 20, 2015
Life sciences
There are reportedly at least three horses in the race to buy Salix Pharmaceuticals, but according to Reuters’ sources, serial acquirer Valeant has the lead.
 
CEO J. Michael Pearson’s company is close to inking a deal for the North Carolina drugmaker at around $160 per share, the news service reports, and an agreement could come as early as next week.
 
But a couple other pharma players may have a mind to get in the way. Word has it that Shire is working with its own advisers on a potential offer, and Endo has also reportedly come calling multiple times.
 
A bidding war could potentially sour things for Valeant, which prides itself on its discipline. It’s that restraint that last November ended a months-long hostile pursuit of Allergan), with Pearson saying he “couldn’t justify” topping the $66 billion offer that white knight Actavis put forth.
 
And Shire, for one, has plenty of cash to throw around. CEO Flemming Ornskov has said multiple times that the Dublin drugmaker is looking for deals to help it reach its $10 billion 2020 sales goal, particularly in areas his company knows well. GI, Salix’s specialty, just so happens to be one such area.
 
For some of Salix’s investors, a sale will be a win no matter who nabs the company. Shareholders have been pushing for a buyout since Salix late last year acknowledged an inventory snafu that overstated sales and sent its CFO packing. After all, those issues may have already scuttled one deal: They cost it a tie-up with Allergan while it was looking to dodge Valeant, The Wall Street Journal said in November.
 
By Carly Helfand
 

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