US group Valeant Pharmaceuticals International Inc won its takeover offer for gastrointestinal drugs maker Salix Pharmaceuticals Inc today (March 16th), agreeing to pay $10.96 billion (£7.41 billion) in cash.
Salix has agreed to Valeant's new offer of $173 per share in cash, which is higher than Valeant's previous bid of $158 per share in cash, which was made late last month, the two companies said in a joint statement. Valeant's new offer provides Salix stockholders with about $1 billion more in cash and gives Salix an enterprise value of about $15.8 billion.
The US group outbid Irish firm Endo International Plc, which offered last week to buy Salix a deal that was worth about $175 per share in cash and stock. Endo said in a statement that "while we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions".
Salix would be the largest purchase ever made by Canada-based Valeant, according to Reuters. Its US-listed shares rose 3.3 per cent to $204 today, while Salix shares rose 1.9 per cent to $172.60 on the Nasdaq. Endo shares gained 1.9 per cent on the Nasdaq to $89.
The acquisition comes a few months after Valeant lost a hostile bid for Allergan Inc, the company behind the Botox anti-wrinkle treatment.
Allergan board chair and chief executive David E.I. Pyott stated that Valeant's proposal creates "significant risks and uncertainties" and this is why it has been turned down by the board.
He added that the board of the firm "believes that the Valeant business model is not sustainable".
Valeant has a target of becoming the fifth largest pharmaceutical company in the US in the next few years and in a bid to hit that goal, the firm recently bought eye health company Bausch & Lomb.
The deal with Salix is expected to close on April 1st.