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Valeant Pharmaceuticals International makes hostile takeover bid for eye care business, Ista Pharmaceuticals

Valeant Pharmaceuticals International Inc. (TSX: VRX; NYSE: VRX), an Ontario-based pharmaceuticals company with an estimated value in excess of $13 billion, has made public an unsolicited offer to acquire the ophthalmic business, Ista Pharmaceuticals (NASDAQ: ISTA), based in Irvine California, at a price of $327 million (including Ista debt of $13 million). The offer of $6.50 per share in cash represents an approximate 67% premium on Ista’s closing price of $3.89 per share prior to disclosure of the offer by Valeant. The move by Valeant now sets the stage for a battle between Valeant and Ista’s management, which may be ultimately adjudicated by Ista’s shareholders. Discussions between the companies are thought to have been in progress since September with Ista formally rejecting the approach on December 14th describing the offer as “grossly inadequate”.