Valeant in $5.7B hostile bid for Cephalon

Mississauga-based Valeant Pharmaceuticals International said Tuesday it has launched a hostile takeover bid for Cephalon, Inc. of Frazer, Pa., in a deal that valued Cephalon at $5.7 billion US.

Valeant is offering $73.00 a share, a 29 per cent premium over Cephalon's recent stock price.

The bid comes a day after Cephalon announced its own takeover bid, for ChemGenex Pharmaceuticals, which is based Melbourne, Australia, in an offer valued at $231 million US.

Valeant also announced its intention to try to replace Cephalon's current board with its own slate of directors.

"We have taken a close look at Cephalon's business and believe we put forward a very compelling offer for Cephalon's stockholders," Valeant CEO J. Michael Pearson said in a release.

"We are also committed to trying to find additional value if we are allowed to conduct due diligence. Given the importance of this transaction proposal to shareholders of both companies, and given that Cephalon's management continues to pursue strategies that in our view reduce the value of a merged entity, we have decided to make our proposal public."

Last September, Valeant merged with Biovail Corporation, Canada's biggest pharmaceutical company at the time, in a deal valued at $3.2 billion US.