Valeant eyes hostile takeover of Ista

Valeant Pharmaceuticals International Inc. (NYSE:VRX; TSX:VRX) made public Friday an unsolicited offer to acquire ophthalmic company Ista Pharmaceuticals Inc. (NASDAQ:ISTA) for $6.50 per share in cash, or about $327 million, including Ista's debt. The price is a 67% premium to Ista's Thursday close of $3.89. Ista jumped $2.79 (72%) to $6.68 on Friday. Valeant, which markets products primarily in the areas of neurology, dermatology and branded generics, said the acquisition would allow the company to build out the ophthalmology area in the U.S.

Valeant said it initially approached Ista privately on Oct. 5 and submitted written proposals on Nov. 23 and Dec. 12. On Dec. 14, Ista sent Valeant a letter rejecting the offer, saying the bid was "grossly inadequate." After Valeant made the offer public Friday, Ista said its board will review all strategic options. Valeant said it would consider improving the offer if it was allowed to conduct due diligence and found additional value. Valeant added that the $6.50 offer will remain in effect until Jan 31. Morgan Stanley is advising Valeant. Greenhill is advising Ista. Valeant was up $0.47 to $45.33 on Friday. In Toronto, the stock gained C$0.65 to C$47.16. ...