$11 billion baby

11 March 2015 By Robert Cyran Follow @rob_cyran

The drugmaker’s stock has rocketed up as it has rolled over competitors, cut costs and preserved profit with a low offshore tax rate. Endo International, now led by Valeant’s ex-president, has copied the model in spades, trumping its rival’s offer for Salix with an $11 bln bid.

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Endo International on March 11 said it had made a competing, unsolicited bid of $11.4 billion – or $175 per share – in cash and stock for Salix Pharmaceuticals. That tops an accepted offer of $158 per share in cash by Valeant Pharmaceuticals.

Endo has offered $45 in cash and 1.4607 of its shares for each Salix share. The proposal would leave Salix investors with 40 percent of the combined company, and Endo said it will offer one board seat to Salix.

In November, Salix revealed that its chief financial officer had resigned and that the inventory of its drugs at distributors was far higher than it had indicated. Valeant said it expects that inventory to be reduced to normal levels by the end of 2015. The company also said it anticipates the net impact on Salix revenue to be greater than $500 million.

Endo would have to pay a $356 million fee to Valeant if it wins its bid for Salix.

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Endo would have to pay a $356 million fee to Valeant if it wins its bid for Salix.

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