Valeant submits $314-million offer for ISTA Pharmaceuticals

Valeant Pharmaceuticals on Friday announced that it submitted an unsolicited bid to purchase ISTA Pharmaceuticals for $6.50 per share, or about $314 million not including ISTA's approximately $13 million in net debt. Valeant noted that the proposed price represents a premium of approximately 67 percent over ISTA's closing price on December 15.

The deal marks the second attempt by Valeant to buy ISTA, which markets ophthalmic and allergy drugs. The first offer, made on October 5, was rejected and caused Valeant to issue its unsolicited offer, which stands until January 31.

"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," remarked Valeant’s CEO Michael Pearson. However, Pearson noted that the drugmaker "would be willing to consider improving our offer price if we were allowed to conduct due diligence and found additional value."

Earlier this year, Valeant announced plans to buy iNova Pharmaceuticals for up to 700 million Australian dollars ($692 million) and recently closed the $88 million acquisition of Afexa Life Sciences. "The proposed acquisition is consistent with Valeant’s growth-through-acquisition strategy, irrespective of therapeutic focus," commented Wells Fargo analyst Michael Tong.

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