Valeant may be willing to pay $160 per share for Salix—an increase from the previously suggested valuation of $150 a share
Valeant Pharmaceuticals is reportedly close to a buyout deal for Salix Pharmaceuticals, reports multiple media outlets. David Faber of CNBC was the first to report on the potential acquisition, and it was later repeated by other media outlets using their own sources.
The deal is said to be worth about $160 per share, according to Nadia Damouni of Reuters.
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Valeant, Salix deal may be days away
According to Damouni, it could be announced as soon as early next week. If the value does end up being around $160 per share, it would place a valuation of approximately $10.2 billion on Salix. The bowel drug maker’s current market capitalization is around $9.7 billion.
After the reports about a potential deal between Valeant and Salix first began surfacing, shares of both drug makers began to edge upward. As of this writing, shares of Salix Pharmaceuticals were up by 4.68% to $57.80 per share, while Valeant Pharmaceuticals shares were up by 1.78% to $72.14 per share.
A big deal for Valeant
If Valeant is able to close a deal with Salix, it would be the biggest one ever for Valeant. Last year Valeant failed to seal a deal with Botox maker Allergan, which successfully defended against the hostile bid by gobbling up Actavis, effectively making itself too big for Valeant to swallow.
Meanwhile Salix management has been looking for strategic solutions to solve inventory problems and deal with a recent shakeup in management. The drug maker said in November that its inventory for some of its drugs was too high, so it had to cut its earnings guidance.
This isn’t the first time we’re hearing that Valeant is close to buying Salix. Earlier this month, ValueWalk reported that Valeant was considering a price of $150 per share to buy Salix and that it had obtained financing to pay for the acquisition.
Valeant isn’t the only company interested in buying Salix either. Earlier this month, Bloomberg reported that Shire was interested in acquiring Salix, in which well-known investment firm Paulson & Co. has a stake. Another potential interested drug maker was Endo International, although Reuters’ source reportedly said Salix turned the company down.