Date
23 November 2017
Activist investor Bill Ackman is a big winner in Valeant Pharmaceutical's  acquisition of Salix after he bought a US$3 billion stake in the the Canadian drug company. Photo: Bloomberg
Activist investor Bill Ackman is a big winner in Valeant Pharmaceutical's acquisition of Salix after he bought a US$3 billion stake in the the Canadian drug company. Photo: Bloomberg

Valeant dangles US$10.96 bln cash to win Salix bid

Valeant Pharmaceuticals International Inc. has won a short-lived bidding war for Salix Pharmaceuticals Inc. with a US$10.96 billion all-cash offer, trumping Endo International Plc., the only other bidder for the maker of gastrointestinal drugs.

Salix agreed to Valeant’s new cash offer of US$173 per share, up from US$158 last month, Reuters reported Tuesday, citing a joint company statement.

Salix is the largest purchase by Canada-based Valeant, whose growth has long been fueled by acquisitions and cost-cutting.

The acquisition vindicates Valeant chief executive Michael Pearson, whose hostile bid for Allergan Inc. failed last year.

Also, it will be a boost for investor Bill Ackman, who said last week that he had bought a US$3 billion stake in Valeant after having worked with the company on the Allergan bid.

The deal is expected to sharply raise Valeant’s debt.

In addition, it is buying a company that last year was forced to slash its full-year earnings forecast after supply levels for certain drugs were higher than earlier indicated.

The short bidding war for Salix pitted Valeant’s Pearson against his former protege, Endo chief executive Rajiv De Silva, a top executive at Valeant until 2012.

Ireland-based Endo said in a statement that it was withdrawing its bid and has other potential deals and research and development on which to focus.

Last week, Endo offered to buy Salix in a deal worth about US$175 per share in cash and stock. As of Friday’s close, Endo’s offer was worth US$172.56 per share.

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CG/RA

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