Valeant increases offer for Salix to US$15.8bn in cash

Endo withdraws its offer for the US manufacturer of gastrointestinal drugs

Valeant Pharmaceuticals International has increased its takeover offer for Salix Pharmaceuticals, a US manufacturer of gastrointestinal drugs, to approximately US$15.8bn in cash, which has led Endo International to withdraw its offer.

Salix has agreed to the Canadian company's new offer of $173 a share in cash, up from the bid of $158.00 per share on 22 February. The revised offer price provides an additional $1bn in cash.

Both Valeant and Salix have agreed the revised terms of the merger agreement.

Endo had offered a cash-and-stock counterbid worth about $172.50 a share on 12 March.

Michael Pearson, Chairman and Chief Executive of Valeant, said: 'We continue to be very excited about the combination of our two companies and we are committed to getting this deal done.'

Thomas D'Alonzo, Chairman and acting Chief Executive of Salix, said: 'We are pleased that the enhanced offer price recognises the value of Salix as the leading gastrointestinal speciality pharmaceutical company and delivers to our stockholders all cash consideration in the near future.'

Valeant expects to close the deal on 1 April.

As part of the revised terms, the break fee payable by Salix to Valeant if the transaction falls through has been increased by $100m to about $450m.

Ireland-based Endo said in a statement that it was 'disappointed with this outcome', but would focus its attention on 'other opportunities in our robust deal pipeline and on maximising our organic growth initiatives including progressing our R&D pipeline'.

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