This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Valeant Goes Hostile With Cephalon Bid

Stocks in this article: CEPHVRX

NEW YORK ( TheStreet) -- Valeant Pharmaceuticals (VRX) is going hostile with its bid to acquire Cephalon (CEPH) for $73 per share, a 24% premium to Tuesday's closing price of $58.75.

Valeant said the cash offer is worth roughly $5.7 billion, and it plans to start a process next week to displace Cephalon's current board with its own nominees after being disappointed by the company's "unwillingness" to talk about a deal.

"Valeant, preferring a consensual process, has made several private approaches to Cephalon's management and board of directors, including three previous letters, which are also attached to this announcement, but has been disappointed by Cephalon's unwillingness to engage in discussions in a timely manner," Valeant said in a press release.



Cephalon shares jumped 24% to $72.89 in after-hours action on volume of 170,000, according to Nasdaq.com.

Valeant said its proposal represents a 29% premium to the 30-day trading average for Cephalon's stock, which was down more than 20% in the past year prior to the surge in extended trading. The shares scraped a 52-week low of $54.15 on March 16, and were trading at a forward price-to-earnings multiple of 10.3x to the consensus fiscal 2011 earnings estimate.

"We have taken a close look at Cephalon's business and believe we put forward a very compelling offer for Cephalon's stockholders," stated J. Michael Pearson, Valeant's chairman and CEO, in a press release. "We are also committed to trying to find additional value if we are allowed to conduct due diligence.

That last statement would seem to hint Valeant would consider raising its offer but Pearson hedged that sentiment a bit.

"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," he said. "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."

Cephalon has yet to comment on Valeant's offer. On Monday, the company launched its own takeover bid for ChemGenex, an Australian biotech company, for $231 million. ChemGenex's lead drug candidate is a proposed treatment for chronic myeloid leukemia called Omapro.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,380.41 +263.17 1.63%
S&P 500 1,886.76 +24.00 1.29%
NASDAQ 4,258.4380 +41.0480 0.97%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs