Salix Pharmaceuticals, Ltd.

Robbins Arroyo LLP: Acquisition of Salix Pharmaceuticals Ltd. (SLXP) by Valeant Pharmaceuticals International, Inc. (VRX) May Not Be in Shareholders’ Best Interests

Robbins Arroyo LLP is investigating the proposed acquisition of Salix Pharmaceuticals Ltd. (NASDAQ: SLXP) by Valeant Pharmaceuticals International, Inc. (TORONTO: VRX). On February 22, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Valeant will acquire Salix. Under the terms of the agreement, Salix shareholders will receive $158.00 for each share of Salix common stock.

Is the Proposed Acquisition Best for Salix Pharmaceuticals and Its Shareholders?

Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Salix is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.

As an initial matter, the $158.00 merger consideration represents a premium of only 0.1% based on Salix’s closing price on February 20, 2015, which is significantly less than the average one-day premium of nearly 33.1% for comparable transactions within the past three years. The $158.00 merger consideration is also well below the target price of $160.00 set by an analyst at Piper Jaffray on January 29, 2015. Notably, Salix has traded over the offer price in the past three years, reaching a high of $172.98 on September 24, 2014.

On November 6, 2014, Salix reported strong quarterly earnings for its VRXthird quarter 2014. Comparing third quarter 2014 to third quarter 2013, total net product revenue increased 49% to $354.7 million, EBITDA increased 63% to $161.2 million, and non-GAAP EPS increased 72% to $1.53 per diluted share. Demand for key products remained robust in the third quarter with prescriptions for XIFAXAN 550, APRISO, RELISTOR and UCERIS achieving strong year-over-year growth of 23%, 15%, 24% and 76%, respectively.

In commenting on these results, Salix President and Chief Executive Officer Carolyn Logan remarked, “Within an 84-day period, spanning mid-July to early-October, three new products – RUCONEST, RELISTOR SI for chronic non-cancer pain and UCERIS rectal foam – were granted marketing approval by the Food and Drug Administration. This level of success is noteworthy for any pharmaceutical company, and provides additional evidence of Salix’s exceptional track record of in-licensing, developing and bringing to market important drugs for patients who need them. These important milestones should enhance our competitive position and expand our market opportunities.”

In light of these facts, Robbins Arroyo LLP is examining Salix board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.

Salix shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. Salix shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.

 

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