Valeant Pharmaceuticals International, Inc. (NYSE:VRX) has commenced an offer to purchase for cash up to $600,000,000 aggregate principal amount of the Company’s outstanding 6.75% Senior Notes Due 2018 (the “Notes”) upon terms and subject to the conditions set forth in the Offer to Purchase, dated March 7, 2017, and a related Letter of Transmittal.
Information relative to the tender offer is set forth in the table below.
* For each $1,000 principal amount of Notes, excluding any accrued and unpaid interest, which will be paid in addition to the Tender Offer Consideration or Total Consideration, as applicable.
** For each $1,000 principal amount of Notes validly tendered on or prior to the Early Participation Date (as defined below).
The tender offer will expire at 11:59 p.m., New York City time on April 3, 2017, unless extended (such date and time, as the same may be extended, the “Expiration Date”). Holders of the Notes who validly tender their Notes pursuant to the offer by 5:00 p.m., New York City time, March 20, 2017, unless extended (such date and time, as the same may be extended, the “Early Participation Date”), will be paid, for each $1,000 principal amount of the Notes accepted for purchase, cash in an amount equal to $1,029.06 (the “Total Consideration”), which includes an early participation payment of $30.00 per $1,000 principal amount of Notes accepted for purchase (the “Early Participation Payment”). Holders who validly tender their Notes after the Early Participation Date but prior to the Expiration Date will be paid, for each $1,000 principal amount of the Notes accepted for purchase, cash in an amount equal to the Total Consideration minus the Early Participation Payment, or $999.06 (the “Tender Offer Consideration”).
Notes that are tendered and accepted for purchase at or prior to the Early Participation Date will be settled only on the date that we refer to as the “Initial Payment Date,” which will promptly follow the Early Participation Date. We currently expect the Initial Payment Date to be March 21, 2017. Notes that are tendered and accepted for purchase after the Early Participation Date but before the Expiration Date will be settled only on the date that we refer to as the “Final Payment Date,” which will promptly follow the Expiration Date. We currently expect the Final Payment Date to be April 4, 2017. If no additional Notes are tendered after the Early Participation Date, or if the tender offer is fully subscribed as of the Early Participation Date, there will be no Final Payment Date.
In addition to the applicable Tender Offer Consideration or the Total Consideration, as the case may be, all Notes accepted for purchase will also receive accrued and unpaid interest on such Notes from the last interest payment date to, but not including, the Initial Payment Date or the Final Payment Date, as applicable, for the Notes.
Subject to the terms and conditions of the Offer to Purchase (and any amendments or supplements thereto), we will accept for payment only validly tendered Notes up to an aggregate principal amount of Notes equal to $600,000,000. If the aggregate principal amount of Notes validly tendered exceeds $600,000,000, proration will occur if we accept Notes for purchase pursuant to the Offer to Purchase. If the aggregate principal amount of Notes validly tendered as of the Early Participation Date is less than $600,000,000, Notes validly tendered after the Early Participation Date may be subject to proration, whereas Notes validly tendered at or prior to the Early Participation Date will not be subject to proration. If the aggregate principal amount of Notes validly tendered on or prior to the Early Participation Date exceeds $600,000,000, we will not accept any Notes for purchase after the Early Participation Date, there will be no Final Payment Date and Notes tendered on or prior to the Early Participation Date will be subject to proration.
The Company will not be required to purchase any of the Notes tendered unless certain conditions have been satisfied, including the receipt of the net proceeds of a private offering of debt securities in an amount sufficient to pay the aggregate consideration payable pursuant to the tender offer and the completion of a planned amendment to the Company’s existing credit agreement, as detailed in the Offer to Purchase.
The Company reserves the right to increase the aggregate principal amount of Notes to be accepted at any time, subject to compliance with applicable law, which could result in purchasing a greater principal amount of Notes in the tender offer. There can be no assurance that we will exercise our right to increase the aggregate principal amount to be accepted.
Tendered Notes may be withdrawn at or prior to 5:00 p.m., New York City time, on March 20, 2017, unless extended.
This announcement is not an offer to purchase or a solicitation of an offer to sell with respect to any Notes. Any offer to purchase the Notes will be made by means of an Offer to Purchase and related letter of transmittal. No offer to purchase will be made in any jurisdiction in which such an offer to purchase would be unlawful.
Shares of Valeant closed today at $11.71, down $0.70 or -5.64%. VRX has a 1-year high of $70.43 and a 1-year low of $11.36. The stock’s 50-day moving average is $14.65 and its 200-day moving average is $19.40.
On the ratings front, Valeant has been the subject of a number of recent research reports. In a report released yesterday, H.C. Wainwright analyst Ram Selvaraju reiterated a Hold rating on VRX, with a price target of $17, which implies an upside of 45% from current levels. Also yesterday, Wells Fargo’s David Maris maintained a Sell rating on the stock without providing a price target.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ram Selvaraju and David Maris have a yearly average loss of 2.1% and a return of 7.5% respectively. Selvaraju has a success rate of 38% and is ranked #4080 out of 4511 analysts, while Maris has a success rate of 48% and is ranked #1099.
Overall, 3 research analysts have rated the stock with a Sell rating, 8 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $16.67 which is 42% above where the stock opened today.
Valeant Pharmaceuticals International, Inc. is a pharmaceutical company which engages in developing, manufacturing, and marketing pharmaceutical products in the areas of dermatology, eye health, neurology, and generics. It operates through the Developed Markets and Emerging Markets. The Developed Markets segment offers over-the-counter and medical products as well as alliance and contract service revenues, in the areas of dermatology and podiatry, neurology, gastrointestinal disorders, eye health, oncology and urology, dentistry, aesthetics, and women’s health. The Emerging Markets consists of branded generic pharmaceutical and branded pharmaceuticals; over-the-counter and medical device products.