Gabelli Downgrades CEPH Rating To Hold

Gabelli & Company, based upon the details surrounding the possible acquisition of Cephalon

by Valeant Pharmaceuticals

, is advising investors and shareholders to Hold CEPH. Claiming that the bid could go higher than initially proposed at $73 per share, Gabelli writes, “Valeant CEO J. Michael Pearson noted several times on the call that his company could potentially raise the offer price if due diligence reveals additional opportunities to add value. The primary focus would be on cost synergies, tax implications, and Cephalon's pipeline.” And additionally states, “Valeant claims that they will be disciplined on price and could walk away from the deal, but we believe that the ability to generate operational synergies beyond the current $300 million estimate will allow them to raise their bid to the $78-80 per share range.” CEPH closed yesterday at $76.92.