MISSISSAUGA, Ont. – Valeant Pharmaceuticals International Inc. (TSX:VRX) is sweetening its hostile bid for Irvine, Calif.,-based ISTA Pharmaceuticals Inc.
Valeant’s new offer raises its earlier bid by a dollar to US$7.50 per share in an offer that values the company at around US$360 million plus debt.
And the Mississauga, Ont.,-based pharmaceutical company says it might pay even more, up to US$8.50 a share, or US$407 million plus debt, if ISTA agrees to a week-long period of due diligence.
“We do not understand why ISTA would not have already pursued discussions with us and provided due diligence access,” Valeant chairman and chief executive Michael Pearson said in a statement.
“Our proposal represents an attractive premium to ISTA’s trading performance, and we believe it offers a compelling opportunity for shareholders in light of ISTA’s ongoing operational challenges.”
Valeant has been pursuing ISTA for months, but the target company said it is in talks with a number of parties that have expressed interest in pursuing a deal.
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“We are pleased with the progression of our strategic review since we embarked on it in mid-December,” ISTA president and chief executive Vicente Anido said in a statement.
“We are considering Valeant’s revised proposal as part of that process, but we are fully committed to completing the strategic review with the aim of maximizing shareholder value. We view Valeant’s willingness to raise its bid at least $2.00 per share as a clear indication of the inadequacy of its initial proposal.”
Valeant, which was formed by the merger of Biovail Corp. (TSX:BVF) and California-based Valeant Pharmaceuticals International (NYSE:VRX) in 2010, is focused on neurology and dermatology with operations primarily in Canada, the United States, Mexico, Brazil, central and eastern Europe and Australia.
ISTA operates the third-largest branded prescription eye care business in the United States.
ISTA shares were up 85 cents at US$8.12 in trading on the Nasdaq market, while Valeant shares were up 28 cents at C$51.24 on the Toronto Stock Exchange.
Valeant has made a series of acquisitions since merging with Biovail, including the addition of Edmonton-based Afexa, maker of the Cold-FX flu treatment
Most recently, the Canadian drug maker completed a acquisition of dermatology company Dermik from French pharma giant Sanofi.
The company has also signed deals for private Australian drug maker iNova and the Ortho Dermatologics division of Janssen Pharmaceuticals Inc.
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