UPDATE 2-Allergan revives talks to acquire Salix -source

Mon Sep 22, 2014 7:10pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Adds background on takeover deal with Actavis, Valeant's hostile offer)

By Olivia Oran

NEW YORK, Sept 22 (Reuters) - Allergan Inc has revived discussions to buy Salix Pharmaceuticals Ltd, a person familiar with the matter said on Monday, asking not to be identified because the talks are confidential.

The exact status of the discussions between the two drugmakers could not be immediately established. Spokesmen for Allergan and Salix declined to comment.

Botox maker Allergan is trying to seal a deal with Salix in order to fend off a $53 billion hostile offer from Valeant Pharmaceuticals Inc. Salix said in July it would merge with an Irish subsidiary of Cosmo Pharmaceuticals SpA in a so-called tax inversion.

Top Salix shareholders do not like the deal with Cosmo and are likely to vote it down, Reuters reported last week, putting pressure on the company to consider a takeover offer instead.

A deal with Raleigh, North Carolina-based Salix, which makes drugs for gastrointestinal disorders, could also complicate Valeant's bid for Allergan. Allergan agreed last week to reach a settlement with Pershing Square Capital Management, in which the company would hold a special meeting on Dec. 18. Pershing Square and Valeant might try to remove Allergan board members during the meeting.

Pershing Square, Allergan's largest shareholder with a 9.72 percent stake, and Valeant made a hostile offer for Allergan in April. Since then, Allergan has been fighting to obtain investor support for its own stand-alone plan, which includes cost cuts and making an acquisition of its own.

To force the company to the table, Pershing's Bill Ackman has been pushing for a special meeting where he hopes to replace most board members with his own nominees, who he expects will be more receptive to Valeant's bid.   Continued...