Valeant Rejected Joint Takeover Approach From Takeda, TPG
May 26 2016 - 09:00PM
Dow Jones News
Valeant Pharmaceuticals International Inc. received a joint
takeover approach this spring from Japan's Takeda Pharmaceutical
Co. and private-equity firm TPG that the beleaguered drugmaker
rejected, according to people familiar with the matter.
The approach came a month or two ago, before Valeant named
Joseph Papa as its new chief executive, and didn't include a firm
price, the people said, adding that there are no current talks. The
board is seeking to give Mr. Papa, who was hired in late April,
time to chart a course for the company, the people said.
At the time of the advance, Valeant was buffeted by an
accounting scandal and questions over its debt load, and was
seeking a replacement for Michael Pearson as chief executive. The
stock had fallen by some 90%, slicing the company's market
capitalization to around $10 billion—a level from which it has yet
to recover.
The turmoil led to pressure on Valeant from analysts and
investors to sell noncore assets, which the company has said it is
exploring. It has now received inquiries about a variety of assets,
but the offer for the whole company was unique, some of the people
said.
The approach shows the value that some of Valeant's businesses
still have and suggests a deal for the entire company at some point
isn't out of the question.
As part of the approach, Takeda would take the business of Salix
Pharmaceuticals, which treats stomach disorders like traveler's
diarrhea and irritable bowel syndrome, or IBS, some of the people
said. TPG would take much of the rest, they said.
Valeant won a bidding contest for Salix last year by paying
about $11 billion. Takeda, Japan's largest drugmaker by revenue,
was one of the bidders in that auction, people familiar with the
matter have said.
Takeda sells gastrointestinal, oncology and
central-nervous-system products. A deal with Valeant would give
Takeda access to Xifaxan, a drug for IBS. Valeant has high hopes
for the drug, predicting it could have $1 billion in sales this
year.
IBS is a priority for the Japanese drugmaker. In March, Takeda's
U.S. unit said it was reorganizing to focus on treating such
gastrointestinal disorders along with a few other conditions.
By adding gastrointestinal drugs, Takeda could better leverage
its sales force, which already sells products like its fast-growing
ulcerative-colitis drug Entyvio.
The company is best known for its Actos diabetes drug. Last
year, Takeda agreed to pay up to $2.4 billion to settle U.S. suits
charging that it hid the cancer risk of Actos.
Takeda's largest deal ever was its 2011 purchase of Nycomed for
around $14 billion.
TPG, which is perhaps best-known these days for investments in
hot technology startups such as Airbnb Inc., has a number of
health-care holdings in its portfolio including Alder
BioPharmaceuticals and a stake in Endo International PLC.
Matt Jarzemsky and Jacquie McNish contributed to this
article.
Write to David Benoit at david.benoit@wsj.com, Dana Mattioli at
dana.mattioli@wsj.com and Jonathan D. Rockoff at
Jonathan.Rockoff@wsj.com
(END) Dow Jones Newswires
May 26, 2016 20:45 ET (00:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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