|Teva will pay $81.50 a share for Cephalon|
|By Staff and Wire Reports|
|Monday, 02 May 2011 08:13|
Teva, based in Israel, said Monday it agreed to pay $81.50 per share, a 5.8 percent premium to Cephalon's closing price on Friday. The price is a 12 percent premium to the since rejected $73-per-share offer from Valeant Pharmaceuticals Inc., made March 29. The latest offer represents a 39 percent premium to Cephalon's stock prior to Valeant's unsolicited offer.
The combined company would have a portfolio of branded drugs with $7 billion in annual sales and more than 30 potential products in late-stage development.
"We are embarking today on a new and exciting future for Teva's branded business, and we are delighted that we will be working together with the Cephalon team," said Shlomo Yanai, president and CEO of Teva, in a statement. "This is transforming for Teva's branded business, as it will help us to deliver on our strategic goal of creating a diversified, multi-faceted company."
The bulk of Teva's revenue comes from generic drugs, but the company does sell several branded drugs, including the multiple sclerosis drug Copaxone and the Parkinson's disease drug Azilect. Cephalon's key drugs include the sleep disorder treatment Provigil and the cancer drug Treanda. The company has products aimed at a broad range of conditions, pain, cancer and central nervous system disorders.
"Cephalon's merger with Teva is the result of a rigorous process that included a review of a wide-range of strategic options undertaken by Cephalon's board of directors and management team to maximize value and deliver significant returns to shareholders," said Kevin Buchi, CEO of Cephalon.
On April 5, Frazer, Pa.-based Cephalon rejected Canada-based Valeant's $73-per-share, or $5.7 billion takeover bid, calling the offer too low. Valeant then moved to make the offer directly to shareholders and nominated candidates for the Cephalon's board.
Teva said the Cephalon buyout will give the company's earnings a boost within the fourth quarter of closing.
The deal also comes just a week after European Union antitrust regulators said they are investigating whether Cephalon and Teva were working together to keep a generic version of Provigil out of the European market. In 2005, the companies settled patent disputes relating to Provigil -- which is also known as Modafinil -- in the U.K. and the U.S.
As part of that deal, Teva agreed not to sell its generic version of Provigil in the EU as well as Iceland, Liechtenstein, and Norway before Oct. 2012, the EU's competition watchdog said. The European Commission is now probing whether the deal broke competition rules.