UPDATE 3-Valeant near deal to acquire Bausch & Lomb -source

Fri May 24, 2013 4:14pm EDT
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By Greg Roumeliotis and Jessica Toonkel

NEW YORK May 24 (Reuters) - Canada's Valeant Pharmaceuticals International is nearing a deal to acquire eye care company Bausch & Lomb Holdings Inc from Warburg Pincus LLC for about $9 billion, a person familiar with the matter said on Friday.

Valeant shares spiked to their highest level since 2001 and were up 13 percent at C$86.86 in afternoon trading in Toronto.

"This deal would not be too surprising given that Valeant has said it wants to do a big, mega deal and there are not that many candidates," said David Krempa, an analyst at Morningstar. "Still, I would not expect that they are done doing big deals."

The source that spoke to Reuters on Friday requested anonymity because the matter is not public. Montreal-based Valeant could not be immediately reached for comment. Bausch & Lomb and Warburg Pincus declined to comment.

The Wall Street Journal, which earlier reported on the talks over Bausch & Lomb, said a deal might come as soon as next week.

Separately on Friday, the U.S. Department of Justice said that ISTA Pharmaceuticals, which Bausch & Lomb acquired in March 2012 for $500 million, pleaded guilty to charges related to the drug Xibrom, including offering doctors kickbacks to prescribe it. ISTA will pay $33.5 million related to conduct from 2006 to 2011, Bausch & Lomb said in a statement.

"It kind of removes an obvious overhang," said a Valeant shareholder. But "I would expect that, regardless of whether Valeant was going to be interested in them or not."   Continued...