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Valeant bids US$5.7b to buy Cephalon
By Bill Berkrot |
March 31, 2011, Thursday
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Print Edition
Print Edition
CANADIAN drug maker Valeant Pharmaceuticals International said it made an unsolicited US$5.7 billion bid to buy Cephalon Inc and plans to make its case directly to Cephalon shareholders.
Valeant, formed when Canada's Biovail bought United States-based Valeant in September for US$3.3 billion and took its name, said it planned to propose a slate of directors to replace Cephalon's board with its own nominees.
The US$73-a-share bid, which Valeant expects to finance entirely with debt, represents a 24 percent premium over Cephalon's closing share price of US$58.75 on Tuesday, and about a 29 percent premium over the US drug maker's 30-day trading average.
Valeant Chief Executive Michael Pearson said Cephalon in meetings between the companies signaled a belief that its shareholders would not find the Valeant offer compelling. But he plans to talk to Cephalon shareholders directly beginning next week.
"We'd love to do this on a friendly basis and if we get a clear signal that their shareholders are not interested, there's many other things that we can do and we'll move on. We don't have to do this deal," Pearson told Reuters in a telephone interview.
"In next few weeks we'll get a good sense. This is not going to be a long process," Pearson said.
Pearson said Valeant would consider raising its offer if allowed to do due diligence.
"There will be a lot of pressure on them to at least open their books to due diligence," David Maris, an analyst with Credit Agricole Securities, said of Cephalon management.
Valeant, formed when Canada's Biovail bought United States-based Valeant in September for US$3.3 billion and took its name, said it planned to propose a slate of directors to replace Cephalon's board with its own nominees.
The US$73-a-share bid, which Valeant expects to finance entirely with debt, represents a 24 percent premium over Cephalon's closing share price of US$58.75 on Tuesday, and about a 29 percent premium over the US drug maker's 30-day trading average.
Valeant Chief Executive Michael Pearson said Cephalon in meetings between the companies signaled a belief that its shareholders would not find the Valeant offer compelling. But he plans to talk to Cephalon shareholders directly beginning next week.
"We'd love to do this on a friendly basis and if we get a clear signal that their shareholders are not interested, there's many other things that we can do and we'll move on. We don't have to do this deal," Pearson told Reuters in a telephone interview.
"In next few weeks we'll get a good sense. This is not going to be a long process," Pearson said.
Pearson said Valeant would consider raising its offer if allowed to do due diligence.
"There will be a lot of pressure on them to at least open their books to due diligence," David Maris, an analyst with Credit Agricole Securities, said of Cephalon management.
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