Salix Said in Talks to Sell to Actavis as Allergan Deal Fades
Oct. 2 (Bloomberg) — Salix Pharmaceuticals Ltd. is in talks to sell itself to Actavis Plc, said people with knowledge of the matter, after it failed to reach a deal with Botox maker Allergan Inc.
Though no deal is imminent, an agreement between Salix and Actavis has become more likely in the last week, the people said, asking not to be identified discussing private information. Allergan’s effort to acquire Salix stalled in recent days over valuation concerns and after Allergan’s shareholders reacted negatively to the idea, one of the people said.
Salix, whose top selling drug is Xifaxan, a treatment for travelers’ diarrhea, has a $9.6 billion market value. The Raleigh, North Carolina-based company is unlikely to complete an acquisition of Cosmo Pharmaceuticals SpA and will terminate the agreement, one of the people said.
Representatives for Actavis, Allergan and Salix didn’t immediately respond to phone calls seeking comment. CNBC reported earlier that Salix’s talks with Allergan had slowed and that the purchase of Cosmo Pharma is unlikely to proceed.
Allergan held talks to acquire Salix in an effort to make itself too costly a target and fend off a hostile takeover offer from Valeant Pharmaceuticals International Inc., people with knowledge of the matter have said. Salix and Allergan held on- again, off-again talks since July, the people said.
Allergan faced public criticism over those efforts from some of its largest shareholders.
T. Rowe Price Group Inc., Allergan’s third-largest shareholder, said Sept. 26 that the drugmaker shouldn’t move forward with any acquisition, even all-cash deals that normally don’t require a vote, without shareholder approval. Jackson Square Partners LLC and Pentwater Capital Management, which also own shares, raised similar concerns in public letters to Allergan.
Other large Allergan shareholders have also voiced their disapproval privately, one person said.
To contact the reporters on this story: David Welch in New York at dwelch12@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman
