Salix shares rise on Allergan acquisition rumors

Shares of Salix Pharmaceuticals were up more than 5 percent in afternoon trading Tuesday after multiple media outlets reported that the Raleigh company has resumed discussions with Allergan about a possible acquisition.

Allergan, the maker of Botox, is seeking to acquire Salix in an effort to fend off a hostile takeover offer from Valeant Pharmaceuticals, the Wall Street Journal, Bloomberg News and CNBC anchor David Fabor have all reported.

Buying Salix would make Allergan a more expensive acquisition target for Valeant, which has partnered with Pershing Square Capital Management to make its takeover bid.

William Ackman, Pershing Square’s chief executive, wrote in a letter to Allergan’s board that he would sue the company if it went ahead with an acquisition of Salix, the New York Times reported.

A deal could value Salix at more than $10 billion, the Wall Street Journal reported, citing people with knowledge of the deal. The newspaper reported that the talks are at an advanced stage and that an all-cash deal may be announced this week or next.

A deal with Allergan would likely halt Salix’s planned merger with Cosmo Technologies, an Ireland-based subsidiary of Cosmo Pharmaceuticals, the WSJ reported. The newspaper, again citing people with knowledge of the talks, reported that the Cosmo deal is already in danger of being voted down by Salix shareholders.

The talks between Allergan and Salix had broken off for several weeks because Salix was seeking a higher price than Allergan wanted to pay, Bloomberg reported, also citing people with knowledge of the matter.

Salix, which sells drugs to treat gastrointestinal ailments, has a market value of $10.7 billion. The employs more than 900 people, including about 300 in Raleigh.

Salix has been one of the Triangle's best-performing companies in recent years. It has won regulatory approval for more than a dozen drugs and expects revenue to exceed $1 billion this year for the first time.

Salix shares, which opened at $159.83, were up more than $9 in trading this morning.