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Endo attempts to outbid Valeant for Salix Pharma

Published on 12/03/15 at 10:13am
Salix image

Endo has joined the race for Salix, the firm that Valeant reached a $14.5 billion agreement to purchase last month.

Dublin-based Endo has exploited a ‘superior proposal’ clause in the merger agreement between Salix and Valeant to lodge a higher bid in an attempt to hijack the deal. Endo is offering a purchase worth $175 per share – which is 11% higher than Valeant’s existing offer of $158 a share.

In a letter to Salix chairman Tom D’Alonzo, Endo president Rajiv da Silva says he believes the offer is “substantially superior to the pending Salix-Valeant proposal” that would be a ‘compelling combination’.

Endo is keen to wrap up the transaction quickly – possibly to avoid a bidding war – and the letter closes with da Silva’s objective “to publically announce a definitive merger agreement within one week”.

In a statement the company says: “Endo 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.

“If a negotiated transaction were to be agreed to with Salix, Endo anticipates that the transaction could close in the second quarter and is confident that it would obtain any regulatory and shareholder approvals. The proposed transaction would not be subject to any financing condition.”

Endo Pharma operates principally in the US and focusses on pain, urology, endocrinology and orthopaedics. Other divisions produce medical devices and over the counter medicines, as well as products marketed in Canada and Mexico.

In a statement Valeant remains bullish, saying: “We are firmly committed to our all-cash agreed transaction, which delivers immediate and certain value to Salix shareholders. The tender offer is scheduled to expire at the end of the day on 31 March 2015, and Valeant expects to be in the position to close the transaction on 1 April 2015."

Lilian Anekwe

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