April 22, 2016 / 2:12 AM / 2 years ago

Valeant in talks to hire Perrigo's Papa as CEO: source

(Reuters) - Drugmaker Valeant Pharmaceuticals International Inc (VRX.TO) is seeking to appoint Joseph Papa, Perrigo Co Plc’s (PRGO.N) boss, as its new chief executive, a source familiar with the matter said.

The headquarters of Valeant Pharmaceuticals International Inc., seen in Laval, Quebec November 9 2015. REUTERS/Christinne Muschi

The Canadian drugmaker is negotiating a contract with the Papa and it aims to announce his appointment as soon as next week, the source told Reuters on Thursday.

However, Perrigo’s board has not said whether it would allow Papa to void a non-compete clause in his contract, the source said.

Valeant declined to comment on what it called “rumors.”

Ireland-based Perrigo issued a press release on Friday morning saying it does not comment on “speculation or market rumor.”

Valeant shares rose 6 percent to $35.40 in pre-market New York trading from a close of $33.33.

The Wall Street Journal reported on Thursday that Valeant was looking to name Papa as its next CEO.

Valeant said in March CEO Michael Pearson was leaving the company, just three weeks after returning from a two-month medical leave. The company said at that time Pearson would remain in his post until it finds his successor.

Debt-laden Valeant has recently settled with some of its lenders after a missed deadline for filing its annual report put the company at risk of a default. It secured an extension until May 31 but has pledged to file its statements toward the end of April.

Reuters reported last week Valeant had brought in investment banks to review its options amid interest from buyout firms and other companies in its businesses.

Pearson and activist investor William Ackman, who joined Valeant’s board last month, have said Valeant was considering selling non-core assets to help reduce its $30 billion debt pile.

Papa last year vigorously defended Perrigo against a hostile takeover offer from Mylan NV (MYL.O), saying that the offer undervalued the company. Perrigo shares fell 4 percent to $123.25 on Friday in pre-market New York trade.

Additional reporting by Rama Venkat Raman in Bengaluru and Caroline Humer in New York; Editing by Gopakumar Warrier

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