US pharmaceutical giant Cephalon which has made a $A225 million offer for the locally listed ChemGenex has in turn copped a bid from a rival drug group in North America.
Valeant Pharmaceutical International of Canada, yesterday launched a hostile $US5.7 billion bid for Cephalon, with an offer at $US73 a share.
Valeant focuses on neurology and dermatology
The offer is a 24% premium to Tuesday’s closing price of $US58.75 for Cephalon.
The company’s shares jumped to $US72.89 in after hours trading in the US.
Valeant says it will try to unseat Cephalon’s current board of directors with its own nominees after making several private approaches to the company, which showed “unwillingness to engage in discussions in a timely manner.”
Cephalon makes sleep and pain drugs and had 2010 revenue of $US2.81 billion.
“We have taken a close look at Cephalon’s business and believe we put forward a very compelling offer for Cephalon’s stockholders,” Valeant Chief Executive Officer J. Michael Pearson said in the statement.
“We are also committed to trying to find additional value if we are allowed to conduct due diligence.”
Valeant plans to fund the transaction entirely with debt, and said Goldman Sachs had provided a "highly confident letter for the full amount of the financing."
Cephalon responded in a subsequent statement yesterday, saying that it had received an unsolicited bid from Valeant on March 18 to acquire the company for $US73 a share.
That was in turn followed by a second bid offer Friday to either buy the company for $US73 a share, “or to purchase Cephalon’s non-oncology related assets for $US2.8 billion.”
“Upon the receipt of each of Valeant’s proposals, Cephalon acted expeditiously to commence an analysis of both alternatives presented,” Cephalon said.
“The company advised Valeant that it is working with its financial advisors to review and consider each proposal.
"In addition, the company advised Valeant that its board of directors would be meeting to consider the proposals and planned to respond to Valeant during the week of April 4th.”
Cephalon has announced two of its own acquisitions in the past two weeks.
The company has the bid for Australia’s ChemGenex and announced its acquisition of Gemin X Pharmaceuticals Inc. for $US225 million.
ChemGenex CEO, Greg Collier told the Australian media yesterday that the $225 million takeover bid from Cephalon was locked in after the shares dropped 5% on news that its bidder might fall to the Canadian offer.
Worried investors pushed ChemGenex shares down sharply at the opening, before they settled off 2.5¢ at 65¢. Under the law, Cephalon has announced an offer and must send documents to shareholders within six months or face penalties.
