Endo Threatens Valeant’s Deal with Competing Bid for Salix Pharmaceuticals

Today, Endo International plc confirmed that it has made a takeover bid for Salix Pharmaceuticals Ltd., looking to interrupt Valeant’s plans to acquire the gastrointestinal drugmaker.

Endo said that it has submitted a proposal to the Board of Directors of Salix to acquire all of the outstanding shares of common stock of Salix in a negotiated cash and stock transaction.

In February, Valeant Pharmaceuticals agreed to buy Salix for about $10 billion, or $158 per share. Now, Endo is offering Salix $175 per share in cash and stock for the company in a deal that values Salix at about $11.2 billion.

Endo said that it “believes that its cash and stock proposal would provide Salix shareholders with a substantial premium and immediate cash value, as well as the opportunity to participate in the significant upside potential of a global leader in specialty pharmaceuticals with a highly diversified platform for future growth, through a material equity component.” The company said that it believes its proposal is superior to the agreement Salix currently has in place with Valeant Pharmaceuticals.

If Salix decides to walk away from its deal with Valeant, Endo would have to pay Valeant a $365 million breakup fee, or about $5.50 per share. If a negotiated transaction were to be agreed to with Salix, Endo believes the transaction could close in the second quarter of 2015.

Endo is a specialty pharmaceutical company focused on pain medications. This would not be the first time the company broke up a merger deal. Last year Endo spoiled Auxilium Pharmaceutical’s merger deal with QLT Inc., offering $2.6 billion for Auxilium.

The move is the latest in the trend of mergers and acquisitions in the healthcare industry. Last year, pharmaceutical companies announced $268 billion in mergers globally, more than double the volume in 2013. This trend seems to be continuing, with $65 billion of transactions in 2015 to date, up from $38 billion over the same period in 2014.

Source: Endo International plc

Last updated: 3/11/15; 3:55pm EST

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