UPDATE 5-Valeant trumps Endo with $10.96 billion bid for Salix Pharma

Mon Mar 16, 2015 8:31pm EDT
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(Adds Financial Times report that Ackman plans to buy 3 million shares for $600 million, in 13th paragraph)

By Ankur Banerjee and Rod Nickel

March 16 (Reuters) - Valeant Pharmaceuticals International Inc increased its offer for Salix Pharmaceuticals Inc to $10.96 billion in cash on Monday, eclipsing Endo International Plc, the only other bidder.

The maker of gastrointestinal drugs has agreed to Valeant's new offer of $173 a share, up from a bid of $158 per share in cash made late last month, the two companies said in a joint statement.

Salix would be the largest purchase ever made by Canada-based Valeant, whose growth has been fueled by acquisitions and cost-cutting. The acquisition would offer solace for dealmaking Valeant Chief Executive Michael Pearson, whose hostile bid for Allergan Inc failed last year.

It would also boost investor Bill Ackman, who announced last week he had bought a more than $3 billion stake in Valeant after having worked with the company on the Allergan bid.

Still, the deal would sharply raise Valeant's debt, and it is buying a company that last year was forced to slash its full-year earnings forecast.

The short bidding war for Salix pitted Valeant's Pearson against his former protege, Endo Chief Executive Rajiv De Silva.

Salix shares rose 2 percent to $172.75 on the Nasdaq on Monday, while Valeant's U.S.-listed shares gained 2.5 percent to $202.34.   Continued...