UPDATED: Valeant, Shire prep Salix bids

Valeant CEO J. Michael Pearson

Earlier this month, rumors started swirling that Valeant ($VRX) was talking with its advisers about a potential bid for North Carolina's Salix Pharmaceuticals ($SXLP). Now, it's reportedly one step closer to making that happen--but it may not be alone.

The Canadian pharma has arranged the necessary financing to make an offer--one that's likely to ring in at more than $150 a share, Bloomberg's sources say. But meanwhile, Shire's ($SHPG) not far behind, Reuters reports: It's working with its own advisers on a potential offer.

There's no guarantee either company will go through with a deal, the sources caution, especially with Valeant--which prides itself on its disciplined dealmaking--wary of overpaying for the drugmaker, which boasts a value of about $10.9 billion. 

The serial dealmaker has reemerged on the M&A scene this month after a quiet period that followed its failure to nab longtime hostile target Allergan ($AGN). Just this week, it walked away with the rights to cancer vaccine Provenge--its first foray into oncology--and other assets from bankrupt biotech Dendreon ($DNDN) after no other bidders topped its $400 million offer.

Salix would be yet another departure from CEO J. Michael Pearson's recent acquisition strategy, which has centered mainly on the fast-growing skincare and eyecare fields. GI specialist Salix's lineup features drugs to treat ulcerative colitis and travelers' diarrhea, and its lead drug Xifaxan is currently awaiting word from the FDA on an irritable bowel syndrome indication.

Shire CEO Flemming Ornskov

Shire, on the other hand, lists GI as one of its core focus areas, and deal-minded CEO Flemming Ornskov has said he's looking for buys in areas where it "knows the field." The company is looking to strike again in the M&A arena after inking a $5.2 billion pact last month for NPS Pharmaceuticals ($NPSP), which brought along short bowel syndrome therapy Gattex.

Some Salix investors, though, will be happy no matter who nabs the company--as long as someone does. The pharma acknowledged an inventory snafu late last year that overstated sales and sent its CFO packing--issues that could have cost it a buyout from Allergan as it was looking to escape predator Valeant's clutches. And though the company is working to get things back on track--it plans to restate its financials for the past 7 quarters, it said in January--some shareholders are pressing for a sale.

- get more from Bloomberg
- see Reuters' story

Special Report: Pharma's top 10 M&A deals of 2013 - Valeant/Bausch + Lomb - Salix/Santarus

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