Valeant back on takeover path, now eyeing Sweden's Meda: Canada OKs Sublinox

Unconfirmed press reports indicate that Canada’s Valeant Pharmaceutical International (NYSE: VRX) is seeking yet another acquisition, this time setting its sights on Sweden’s Meda (OMX: MEDA A), which has itself been buying products, as well as US specialty drug firm Alaven for $350 million last year. Meda’s shares rose 12% to 79.35 Swedish kronor in early trading this morning, but the firm has not confirmed any talks.

The Wall Street Journal, which broke the story - quoting unnamed people familiar with the discussions, said that Meda had been approached by the Canadian firm in the past two weeks. It noted that Meda has a market capitalization equivalent to $3.4 billion and that, based on a typical takeover premium of 30%, it could fetch around $4.4 billion in a takeover.

Valeant is clearly not short of cash. In May, the company was thwarted in its $5.7 billion hostile attempt to buy US biotech firm Cephalon, outbid by Israel’s Teva. At the time, Valeant’s chief executive, Michael Pearson said the firm had financial resources for an even bigger acquisition and that it would continue to look for suitable candidates.