Valeant Shares Soar on News of Salix Deal

Investors responded favorably to Valeant Pharmaceuticals’ deal to acquire Raleigh-based Salix Pharmaceuticals, pushing Valeant’s stock up nearly 15 percent on Monday.

Valeant announced Sunday that it had reached a deal to acquire Salix for $158 a share, or roughly $10.1 billion in cash. Including Salix’s debt, the deal is valued at $14.5 billion.

Salix could be required to pay up to $400 million if its sale to Valeant Pharmaceuticals doesn’t close, the company reported in a regulatory filing. The terms of the acquisition include a $356.4 million termination fee and the payment of out-of-pocket expenses of up to $50 million to Valeant.

Salix officials have also agreed not to solicit rival acquisition offers. But Salix can provide information to and engage in discussions and negotiations with a third party that makes an unsolicited bid for the company.

In a research note Monday, Sterne Agee analysts Shibani Malhotra and Austin Nelson wrote that they expect the deal with Valeant to close.

“While there have been reports of interest from other potential suitors, it remains unclear whether another bidder will emerge and we expect this deal to close as others may already have stepped in and been rebuffed,” they wrote.

On Monday, Valeant shares rose $25.49, or 14.7 percent, to $198.75 in the regular trading session. In aftermarket trading, the shares rose another $1.45 to $200.20.

This article appeared in print in the February 24th, 2015 edition of Hamodia.