Valeant, Salix Agree On Amended $15.8 Bln Deal, Topping Endo Offer

(RTTNews) - Canadian drug maker Valeant Pharmaceuticals International, Inc. (VRX, VRX.TO) has Monday amended its deal with gastrointestinal drug maker Salix Pharmaceuticals Ltd. (SLXP), now agreeing to acquire it for a sweetened $173 per share in an all-cash deal valued at about $11.1 billion. Including the debt, the deal value is $15.8 billion. The amendment was approved by the Boards of Directors of both companies.

"We continue to be very excited about the combination of our two companies and we are committed to getting this deal done. This revised offer provides Salix shareholders with all-cash at a significant premium and the certainty to close by April 1," Valeant chairman and CEO Michael Pearson said.

Quebec-based Valeant had initially agreed on February 22 to acquire Salix for $158 per share in an all-cash deal valued at about $14.5 billion. The acquisition was approved by the boards of both companies and was expected to close in the second quarter of 2015.

The revised offer price provides an additional $1 billion in cash consideration to Salix stockholders.

Valeant said it expects to close the transaction on April 1, 2015, if the minimum tender condition is satisfied at the end of the day on March 31, 2015. The deal remains modestly accretive in 2015 and will be more than 20 percent accretive in 2016.

Valeant added that the offer price will drop back to $158 per share If all of the conditions to the tender offer have not been satisfied by April 8, 2015.

The new offer represents an increase of 9.49 percent increase over the original offer price of $158 per share, and a 43.9 percent premium over Salix's unaffected price of of $120.19 on January 16, 2015.

Meanwhile, the companies have also agreed to increase the termination fee payable by Salix to Valeant by $100 million and the outside date after which either party may terminate the transaction has been moved to May 1 from August 20, 2015.

Valeant raised the offer for Salix after Endo International PLC's (ENDP, ENL.TO) expressed its interest to buy Salix on March 11 for $175 per share in cash and stock, or $11 billion.

Valeant counts on the acquisition of Salix after last year's failed attempt to acquire Botox maker Allergan, Inc. (AGN), which was later acquired in November 2014 by specialty pharmaceutical company Actavis plc (ACT) in a deal valued at $66 billion.

VRX closed Friday's regular trading session at $197.43, up $2.93 on a volume of 4.79 million shares, while SLXP closed at $169.40, down $0.08 on a volume of 7.28 million shares.