Valeant Pharmaceuticals ($VRX) may get some help in buying Cephalon ($CEPH) from one of that company's investors. A Pennsylvania pension fund has sued Cephalon, saying management has simply refused to consider Valeant's $5.7 billion buyout offer. And that, the pension fund alleges, shows the company is ignoring the best interests of the shareholders.
It's true that Cephalon spurned Valeant's first few offers. But now that Valeant has made a hostile bid, Cephalon's board is preparing to meet next week to weigh the offer, a spokeswoman told Bloomberg. The pension fund wants a Delaware judge to force the board to consider Valeant's bid--and to prohibit the Cephalon from engaging its poison-pill defenses.
Meanwhile, Valeant chief Michael Pearson is tempering his hard-line-on-price promises from earlier in the week. Valeant might just increase its bid, Peason says, if Cephalon cooperates. "If Cephalon's board and management team provide us with the opportunity to do some due diligence," Pearson told the Winnipeg Free Press, "we would be open to sharing a piece of the upside with Cephalon shareholders and give a bump to our offer."