Stifel Raises Price Target On Salix Pharmaceuticals, Ltd. On Possible Takeover

Salix Pharmaceuticals, Ltd. SLXP received a price target increase from $155 to $185 by Stifel, which maintained a Buy rating.

Analyst Annabel Samimy noted their previous financial model assumed a tax inversion opportunity for the company. Changes in regulations at the Treasury Department prompted Samimy to remove that assumption from the model.

The price target increase assumes the chances for Salix to be acquired increased since August. Samimy wrote that the firm believes, “SLXP shares are trading at its fundamental value” at $155 and that “the likelihood of a take-out has increased significantly.” Samimy assumes a “70% probability of acquisition at a 30% premium (~$200)” and raised the Target to $185.

Potential suitors for Salix include Allergan, Inc., Valeant Pharmaceuticals Intl Inc., Actavis PLC and AbbVie Inc.

Salix Pharmaceuticals, Ltd. traded at $154.06 early Wednesday.