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Valeant Pharma (VRX) Rejected Joint Takeda, TPG Takeover Approach - WSJ

May 26, 2016 11:11 PM EDT
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Valeant Pharma (NYSE: VRX) rejected a joint takeover approach from Japan's Takeda Pharmaceutical and private-equity firm TPG, made a month or two ago, the Wall Street Journal reported late Thursday, citing people familiar with the matter.

Under the plan, Takeda would take the Salix Pharmaceuticals business and TPG would take much of the rest, the report said.

The offer came before Joseph Papa was named CEO and did not come with a firm price. There are no current talks as the company looks to Papa to set a course for the beaten-down stock.

Commenting on the development, Mizuho analyst, Irina Koffler, said she doesn't think large shareholders, like Bill Ackman's Pershing Square, can part with the stock, even at a premium to current levels.

"We think that large shareholders and Valeant Board members are so far underwater on their positions that they may be resistant to a potential bid which may "undervalue" the company," she said.

They analyst said they aren't surprised by a speculation of a potential offer given where the stock is trading, or that Takeda was primarily interested in Valeant's Salix segment rather than the entire business. "We believe that strategic buyers would only pursue Valeant's crown jewels, which it may be reluctant to sell," she said.

She said it could require a hostile offer and protracted battle to dislodge the current Board, which most activists may find unattractive. The analyst maintained an Underperform rating and price target of $18 on the stock.



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