The price for Raleigh-based Salix Pharmaceuticals keeps going up. On Monday, Valeant upped its offer to Salix after Endo Pharmaceutical entered the bidding last week.
Salix said it would accept the new offer.
Valeant is now offering just over $11.1 billion in cash.
Valeant and Salix originally announced a deal last month.
The news sent Salix shares up to $174.49 in early trading. Valeant and Endo shares also rose, according to Bloomberg news.
ValueAct Capital Management LLC and Pershing Square Holdings Ltd., which each have a big stake in Valeant, were involved in the talks to sweeten the bid for Salix, a person familiar with the matter said last week.
The Canadian drugmaker now says it will pay $173 per Salix share, a 2 percent premium over Friday’s closing price of $169.40. The companies put the deal’s enterprise value at about $15.8 billion.
“We are committed to getting this deal done,” Valeant Chairman and CEO J. Michael Pearson said.
The bigger bid comes after an offer last week from specialty drugmaker Endo International PLC, which said it would pay 11 percent more for Salix than Valeant. Endo, based in Dublin, Ireland, valued its cash-and-stock offer at $175 per Salix share, or roughly $11.17 billion.
Valeant’s prior offer was about $10 billion in cash, or $158 per share. With debt, that deal was valued at $14.5 billion.
Salix specializes in medicines for gastrointestinal disorders, including Pepcid and Zegerid for ulcers and gastroesophageal reflux, and Relistor for constipation caused by opioid drugs. It’s developing two more drugs for opioid-induced constipation, one for rheumatoid arthritis and a drug called rifaximin for Crohn’s disease and preventing complications of liver cirrhosis. Rifaximin is currently under review for a third use, treating irritable bowel syndrome. Last year, Salix reported total revenue of $1.13 billion and a net loss of $415 million.
Valeant specializes in dermatology, eye health and neurology. It focuses on frequent acquisitions rather than internal drug development. Last year it had revenue of $8.3 billion and net income of $912 million.
Landing Salix would be a redemption for Valeant, which was snubbed in its pursuit of Botox-maker Allergan last year. Valeant is looking to grow and in 2013, it acquired the contact lens-maker Bausch + Lomb for $8.7 billion.
Shares of Salix Pharmaceuticals Ltd. climbed $4.54, or 2.7 percent, to $173.94 in premarket trading Monday. Valeant Pharmaceuticals International Inc.’s stock added $2.37 to $199.80.
