Reuters: Hot Stocks: UPDATE 1-Salix Pharma to buy Santarus for $2.6 billion

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UPDATE 1-Salix Pharma to buy Santarus for $2.6 billion Nov 7th 2013, 23:44 Share this Email Print Reprints * Offer price of $32/share is 37 pct above Santarus' Thursday close * Salix expects deal to add to earnings in 2014 * sees FY 2013 adj EPS $3.20 vs. est $3.24 * Santarus shares up 37 pct, Salix up nearly 10 pct in extended trade (Adds conf call comments, details and share movement) Nov 7 (Reuters) - Salix Pharmaceuticals Ltd will buy Santarus Inc for about $2.6 billion to boost its portfolio of drugs with a complementary set of products from the specialty pharmaceutical company. The $32 per share offer is a 37 percent premium to Santarus' Thursday close on the Nasdaq. Santarus shares rose to $31.90 in extended trade, while shares of Salix were up 10 percent to trade at $77.99. Both Salix and Santarus have a number of products on the market and in clinical development, but none of their target markets overlap, Salix Chief Executive Carolyn Logan said on a conference call with analysts. The combined company will have a portfolio of 22 marketed products. Santarus also reported third-quarter results that were well above analysts' estimates, helped mainly by robust sales of its diabetes drug Glumetza and heartburn drug Zegerid. Salix -- which sells the traveler's diarrhea drug Xifaxan and constipation drug Relistor -- reported weak third-quarter results, but forecast better-than-expected earnings for 2013. The company is also expecting to post solid earnings in 2014 as it looks to gain from the Santarus deal. Salix said it expects the deal - approved by the boards of both the companies - to close in the first quarter of 2014 and to significantly contribute to earnings in the same year. Salix expects adjusted earnings of $5 per share in 2014, up from $3.20 per share it forecast for the current year. Analysts expect Salix to report a full-year 2013 profit of $3.24 per share, according to Thomson Reuters I/B/E/S. Salix plans to pay for the acquisition with about $800 million in cash on hand and $1.95 billion in financing from Jefferies Finance LLC. Jefferies LLC is advising Salix on the deal, with Covington & Burling LLP as legal counsel. Santarus is being advised by Stifel, Nicolaus & Co and Latham & Watkins LLP is its legal adviser. (Reporting by Zeba Siddiqui in Bangalore; Editing by Joyjeet Das and Anil D'Silva) Link this Share this Digg this Email Print Reprints

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