Endo Bidding $170/Share For Salix

Endo International PLC ENDP has made a takeover bid for Salix Pharmaceuticals, Ltd. SLXP, even though Valeant Pharmaceuticals Intl Inc VRX already has an agreement to purchase the latter for roughly $10 billion, the Wall Street Journal has reported.

According to sources familiar with the issue, Endo is trying to outbid Valeant, as it sent on Wednesday a private offer letter to Salix's board. The company is allegedly offering Salix $170-$175 per share in cash and Endo stock, well above the $158 per share that Valeant agreed to pay for the company last month. However, if Salix accepted Endo's offer, some of the extra money would have to be allocated to paying Valeant a $356 million (or approximately $5.50 per share) break-up fee.

"The surprise move is the latest sign of the torrid pace of consolidation in the drug industry, which has recently been reshaped through a series of large tie-ups, many driven by tax considerations. Last year, $268 billion in pharmaceutical mergers were announced globally, more than double the volume in 2013, according to Dealogic. And 2015 is off to an even-faster start, with $65 billion of transactions year to date, up from $39 billion over the same period in 2014," the Wall Street Journal explained.

Shares of Endo have dropped about 2 percent on the news, recently trading at $87.87.

Shares of Salix spiked up more than 6 percent, recently trading at $167.01.

Shares of Valeant were down more than 4 percent at $192.95.