It’s all change again in the fight for Salix Pharmaceuticals – last week’s $11 billion bid by Endo International has been binned in favour of rival bidder Valeant Pharmaceuticals International, which has put forward a revised $173-a-share offer.
Salix, which makes gastrointestinal drugs, has accepted the $11.1 billion offer, which is higher than Valeant’s initial offer of $158 per share ($10.4 billion), which was then surpassed by Endo’s cash and stock counter offer of $11 billion.
While Endo’s bid was attractive, there was uncertainty around the close deadline and approval from Endo shareholders. However, Valeant’s new bid – which provides Salix stockholders with about $1 billion more in cash, still has some question marks, notably around how the firm plans to pay for its acquisition.
Under the new deal, Valeant, which is known for its acquisition and cost-cutting approach, has shortened the date it will keep its offer on the table from 20 August to 1 May. If the offer’s conditions have not been met by 8 April, Valeant’s bid will drop back to what it initially offered.
Tomas D’Alonzo, chairman of the board and acting chief executive of Salix, said: “We are pleased that the enhanced offer price recognises the value of Salix as the leading gastrointestinal specialty pharmaceutical company and delivers to our stockholders all cash consideration in the near future.”
Meanwhile, Endo said in a statement: “While we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions.” The company said it still has plenty of M&A deals it could pursue.
Valeant shares jumped 3.3% on Monday morning, while Salix shares rose 1.9%.