The new offer from Valeant (NYSE: VRX) raises its initial $158 per share bid to $173 per share, valuing the transaction for Raleigh, NC-based Salix (NASDAQ: SLXP) at more than $11.3 billion. The increase, which adds $1 billion to Valeant’s initial offer for Salix, is still shy of a competing offer from Endo Pharmaceuticals (NASDAQ: ENDP), which last week contacted Salix with a bid of $175 per share. But Dublin, Ireland-based Endo proposed a cash and stock deal while Valeant, based just outside of Montreal, Canada, is offering Salix shareholders cash.
Following Valeant’s revised offer, Endo announced today that it is withdrawing its offer. [Sentence added with Endo announcement.]
The boards of directors for Valeant and Salix have approved the changes to their previously reached merger agreement. But if Salix pulls out of the deal in favor of another offer, it will now cost Salix more, since the amended agreement raises the break-up fee from $355 million to $455 million. The changes put pressure on Salix to close a deal with Valeant soon. Valeant’s revised offer is good only through April 8. After that date, the offer drops back to the initial $158 per share price.
“The revised offer provides Salix shareholder with all-cash at a significant premium and the certainty to close by April 1,” Valeant CEO J. Michael Pearson said in a statement.
Salix is a specialty pharmaceutical company focusing on gastrointestinal drugs. The company’s portfolio of 22 commercialized products generated $1.1 billion in revenue in 2014.