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Valeant launches $327 million takeover bid for Ista
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MISSISSAUGA, Ontario — Valeant Pharmaceuticals International has offered a proposal to Ista Pharmaceuticals' board of directors to acquire the company for $6.50 per share in cash, according to press releases from both companies. The transaction would total $327 million.
Ista has refused Valeant's offer, which it called "grossly inadequate and not in the best interests of Ista shareholders."
The offer is about two-thirds greater than Ista's 60-day trading average of $3.87 per share, Valeant said. The stock closed Thursday at $3.89 per share.
"The proposed $6.50 per share price represents a meaningful premium to Ista's recent trading performance, and we believe it represents a compelling opportunity for Ista's shareholders in light of the continuing challenges facing Ista," J. Michael Pearson, chairman and CEO of Valeant, said in the release. "We would be willing to consider improving our offer price if we were allowed to conduct due diligence and found additional value."
Valeant initially approached Ista on Oct. 5, followed by a formal proposal on Nov. 23, according to Valeant. Ista rejected the proposal on Dec. 14, leading to Valeant's public offer.
"Given the importance of the proposed transaction to shareholders of both companies, we have decided to make our proposal public," Mr. Pearson said in the release. "We believe Ista stockholders should not be denied the opportunity to determine for themselves whether their board and management should engage with Valeant in a meaningful and productive dialogue regarding our proposal."
The offer will be available through Jan. 31, according to the Valeant release. The transaction would amount to $314 million in cash. Valeant also would assume responsibility for $13 million in debt, increasing the overall value of the proposal to $327 million.