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Valeant makes hostile bid for Cephalon

Valeant Pharmaceutical has made a $5.7bn hostile bid for biotech firm Cephalon, a cash offer of $73 per share
Valeant Pharmaceutical has made a $5.7bn hostile bid for biotech firm Cephalon. The cash offer values Cephalon at $73 per share, a 29 per cent premium on the biotech firm's 30-day trading average. 

The move follows several failed attempts by Valeant to discuss a possible takeover deal with management and the board at Cephalon.

"We have taken a close look at Cephalon's business and believe we put forward a very compelling offer for Cephalon's stockholders," said Valeant chairman and CEO, J Michael Pearson. "We are also committed to trying to find additional value if we are allowed to conduct due diligence. Given the importance of this transaction proposal to shareholders of both companies, and given that Cephalon's management continues to pursue strategies that in our view reduce the value of a merged entity, we have decided to make our proposal public. We believe this will enable the Cephalon stockholders to determine for themselves whether their board and management should engage with Valeant in a meaningful and productive dialogue regarding our proposal."

"To be clear, we intend to be disciplined on price as we believe we have submitted a full and fair offer for Cephalon based on the information available to us. If our offer does not have the requisite support of Cephalon's stockholders, we will focus our attention on other opportunities to invest our capital," he continued.

Cephalon's shares closed up 2.05 per cent on March 29 at $58.75, before news of the Valeant's intentions were made public.

News of the hostile bid comes just days after Cephalon revealed plans to make a $231m bid for Australian biotech company ChemGenex, which has a promising therapy for chronic myeloid leukaemia in late-stage development.

30th March 2011

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