The companies said Monday that Valeant boosted its cash offer to acquire all the outstanding common stock of Salix to $173 per share, or a total deal of about $15.8 billion, from $158 per share under the $14.5 billion deal announced in late February.
The revised offer, which stands through April 7, provides approximately an additional $1 billion in cash to Salix stockholders, the companies reported.
As previously announced, if the minimum tender condition is satisfied at the end of the day on March 31, Valeant expects to close the transaction on April 1. If all of the conditions to the tender offer haven’t been satisfied by April 8, the offer price will drop back to $158 per share.
In consideration for the increased offer price through April 7, the termination fee payable by Salix to Valeant has been raised by $100 million. Also, the outside date after which either party can terminate the transaction has been moved up, to May 1 from August 20.
“We continue to be very excited about the combination of our two companies, and we are committed to getting this deal done,” J. Michael Pearson, chairman and chief executive officer of Valeant, said in a statement. “This revised offer provides Salix shareholders with all-cash at a significant premium and the certainty to close by April 1. By offering a significant premium with a 100% cash offer, eliminating market and company equity risk that could arise from other non-cash offers with a four-month-plus closing timeline, instead of a closing by April 1, our new arrangement creates significant shareholder value for Salix.”
Valeant has cited Salix’s leadership in the gastrointestinal market segment — including well-known prescription brands Xifaxan, Uceris, Relistor and Apriso — as a key driver of the deal.
“We are pleased that the enhanced offer price recognizes the value of Salix as the leading gastrointestinal specialty pharmaceutical company and delivers to our stockholders all cash consideration in the near future,” stated Thomas D’Alonzo, chairman and acting CEO of Salix.
Also on Monday, Endo International plc confirmed that it is withdrawing its cash-and-stock offer to acquire Salix.
Endo said it’s moving ahead with its growth strategies and active pipeline of acquisition targets across its three core platforms: U.S. branded pharmaceuticals, U.S. generic pharmaceuticals and international pharmaceuticals.
“While we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions. We would like to wish Salix and Valeant continued success as they move forward with their transaction,” Endo said in a statement. “As a next step, Endo is focusing our attention on other opportunities in our robust deal pipeline and on maximizing our organic growth initiatives including progressing our R&D pipeline. We will continue to drive Endo’s growth as a global leader in specialty pharmaceuticals and look forward to creating value for our shareholders while improving patients’ lives.”