Salix, Endo deal

Endo submitted a proposal to acquire Salix for $175 per share in cash and stock, or about $11.2 billion. The price, an 11% premium to Salix’s close of $157.65 on March 10, the day before the deal was announced, comprises 1.46 shares of Endo stock and $45 in cash per Salix share.

Last month, Valeant Pharmaceuticals International Inc. (TSX:VRX; NYSE:VRX, Laval, Quebec) offered to acquire Salix for $158 per share in cash, or $10.2 billion. At the time, Valeant said the deal had a total enterprise value of $14.5 billion. Endo also said the offer is an 11% premium over the existing offer from Valeant. Although both the board of Salix and Valeant approved the deal, Endo said it believes its proposal constitutes a “superior proposal” under the terms of the agreement between Salix and Valeant. If accepted, Endo said it expects the deal to close next quarter. Valeant said in a statement that it is “firmly committed” to its offer and expects to close the transaction on April 1. If Salix backs out of its deal with Valeant, Salix would owe Valeant a breakup fee of $356.4 million plus out-of-pocket expenses of up to $50 million. Salix said it is reviewing the offer and advised its stockholders to take no action (see BioCentury, March 2). ...