Valeant Pharmaceuticals has arranged financing for a possible acquisition of Raleigh-based Salix Pharmaceuticals, Bloomberg News reported Thursday, citing people familiar with the matter.
Valent’s likely to make an offer of more than $150 a share, but is wary over overpaying and still could decide to explore other acquisitions, Bloomberg reported.
Takeover rumors have been swirling around Salix for months. Earlier this month, Bloomberg reported that both Valeant, a Canadian drugmaker, and Shire Plc were exploring bids for the company.
Salix, which sells drugs to treat gastrointestinal ailments, has been in turmoil since November when the company disclosed that it had been reporting elevated inventory levels for three of its drugs. The disclosure led to the departure of both the company’s chief financial officer and chief executive officer.
Salix has since said it would restate its financial statements for 2013 and the first three quarters of 2014.
In a research note Friday, Sterne Agee analysts lowered their rating on Salix stock from buy to neutral, saying the stock now reflects the company’s fundamental value.
“While we continue to believe that Salix remains an acquisition candidate and that it is highly unlikely the company will remain independent over the next 12 months, we simply can’t recommend putting new money into SLXP shares at current valuation as such a recommendation would be on M&A speculation alone,” analysts Shibani Malhotra and Austin Nelson wrote.
Sterne Agee now has a $145 price target for Salix shares. The stock closed Friday at $152.35, up $3.17. This stock is up 32 percent since the beginning of the year.