Reports: Valeant Nears Deal To Buy Salix Pharma For About $10 Bln

(RTTNews) - Canadian drug maker Valeant Pharmaceuticals International Inc. (VRX, VRX.TO) is nearing a deal to buy gastrointestinal drug maker Salix Pharmaceuticals Ltd. (SLXP) for about $10 billion, according to media reports on Saturday. A deal could be announced as soon as Sunday.

Valeant will reportedly pay $158 per share in cash for Salix, just above Salix's closing stock price of $157.85 on Friday.

The acquisition of Salix will mark a return to dealmaking for Valeant, which last year failed in its hostile bid to acquire Botox maker Allergan Inc. (AGN).

Irvine, California-based Allergan was later acquired in November 2014 by specialty pharmaceutical company Actavis plc (ACT) in a deal valued at $66 billion.

While it was seeking to fend off the hostile bid from Valeant, Allergan had entered into merger talks with Salix, but failed to reach a deal over valuation concerns. Actavis had also considered acquiring Salix last year.

Valeant was on acquisition spree until 2013, when it completed the purchase of eye-care company Bausch & Lomb.

In January 2015, Valeant was selected as the lead bidder for the assets of Dendreon Corp. (DNDN), a developer of a drug for advanced prostate cancer. Dendreon had filed for bankruptcy in November 2014.

Raleigh, North Carolina-based Salix Pharma makes drugs to treat ulcerative colitis and travelers' diarrhea. The company is nearing approval for a potential treatment of irritable bowel syndrome.

In October 2014, Salix Pharma said that it mutually agreed to terminate its merger agreement with Italian pharmaceutical firm Cosmo Pharmaceuticals S.p.A. in a tax-inversion deal, and added that will make a $25 million payment to Cosmo.

Salix Pharma, in December, withdrew its previously-issued financial guidance for the fourth quarter as well as fiscal 2014, citing its decision to accelerate the reduction of wholesaler inventory levels.

The revision to the company's wholesale-inventory levels suggested lower-than-expected demand for its drugs, which treat irritable-bowel syndrome, liver problems and other rare diseases.

This was followed by the announcement of retirement of the company's chief executive officer, Carolyn Logan.

VRX closed Friday's trading at $173.26, up $4.13 or 2.44 percent on a volume of 3.50 million shares. SLXP closed Friday's trading at $157.85, up $7.11 or 4.72 percent on a volume of 6.60 million shares.