Exclusive: Shire moves to prepare Salix bid - sources
By Olivia Oran
(Reuters) - British pharmaceutical company Shire Plc (SHP.L: Quote) has taken initial steps towards a bid for U.S. bowel drugmaker Salix Pharmaceuticals Inc SLXP.O and is working with advisers on a potential offer, according to people familiar with the matter.
Shire is evaluating how to secure financing for a Salix bid, one of the sources said. The sources cautioned that Shire may still decide against a bid given the deal's complexity. Salix is considering its options in the midst of a management shakeup and inventory issues, sources previously told Reuters.
Valeant Pharmaceuticals International Inc VRX.TO has also been exploring an offer for Salix, the people added. It is not clear whether other companies are also preparing bids for Salix, which has a market capitalization of $9.2 billion.
The sources asked not to be identified because the deliberations are confidential. Salix, Shire and Valeant declined to comment.
Last November, Salix announced that supply levels for its irritable bowel syndrome drug Xifaxan and other drugs were higher than it had previously indicated, forcing it to slash its full-year earnings forecast.
While Salix last month resolved an accounting problem related to its inventory issue, the company may still face other possible fines and litigation that could stymie a potential deal, the sources said. Shares fell 37 percent on the day the company disclosed its inventory issue.
Salix Chief Executive Carolyn Logan also stepped down last month following the departure of other top executives.
The company said in late January it would restate financial statements for all of 2013 and the first three quarters of 2014. Continued...