No sooner had Actavis ($ACT) announced its deal for Forest Laboratories ($FRX) than analysts started ginning up ideas for (a) a potential bidding war, and (b) follow-up buyouts.
As Bloomberg reports, at least one analyst thinks that Valeant Pharmaceuticals ($VRX), always ambitious and eager for a deal, might step in with a competing bid. Valeant is aiming to grow its way into Big Pharma, and a deal this size could really help.
"I would not be surprised" to see rival bidders, Piper Jaffray analyst David Amsellem told the news service. "Would this be of interest to Valeant? I think the answer is unquestionably yes."
Valeant typically isn't one to start a bidding war, but the last time we pooh-poohed that idea, the Canadian drugmaker actually did trump another buyer. So, we won't make that sort of prediction this time. We will say that Valeant took a look at buying Actavis last year, just as Mylan ($MYL) did. And at least one analyst thinks that Valeant might just wait for the Forest deal to close--and then snap up the combined company.
But Aegis Capital analyst Raghuram Selvaraju doesn't see Valeant bending over backward for Actavis now. He figures Teva Pharmaceutical Industries ($TEVA) is a better fit. "It's an open secret that Valeant looked at Actavis, but Actavis was never at the top of my list for Valeant," Selvaraju told Bloomberg. "There are plenty of other targets for Valeant to focus on."
What about Mylan? It's another generics maker with a small presence in the branded market, and it's looking to grow as well. The Pittsburgh-based company bought an Indian injectables maker, Agila Specialties, last year for $1.6 billion. Now, it may need to swallow something bigger to take part in the industrywide consolidation--or be swallowed by someone else.
- read the Bloomberg story
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