Salix convertibles add on sweetened Valeant deal; Amarin extends gains; Actavis in action

By Rebecca Melvin

New York, March 16 – Salix Pharmaceuticals Ltd.’s convertibles traded higher on Monday on the back of a sweetened takeout deal from Valeant Pharmaceuticals International Inc.

Hedged buyers lifted offers from outright sellers, pocketing profits, traders said of the Salix convertibles.

Amarin Corp. plc’s convertibles continued to push higher, extending strong gains notched last week as investors cheer the Dublin-based specialty drugmaker’s recent financing intended to fund upcoming trials.

Actavis plc’s 5.5% convertibles were up on Monday as the mandatory convertible preferred stock remains in favor since the mega $4.6 billion deal priced last month.

The Actavis 5.5% convertibles were quoted at 104.75 bid, 105.125 offered, with the underlying shares of the global specialty pharmaceutical company with headquarters in Parsippany, N.J., rising about 2% to $305.00.

Energy convertibles were weak but didn’t trade over-actively despite another leg lower for crude oil prices.

West Texas intermediate crude oil for April delivery traded down 2.25% to $43.83 on Monday. The contract has moved down for the last four sessions for a 15% cumulative move lower.

But there was not an overabundance of selling on Monday in U.S. energy convertibles or in the U.S. convertibles market overall, sources said.

Energy XXI (Bermuda) Ltd.’s 3% convertibles fell to 32 or 33 from 35.5 while the underlying shares of the Houston-based energy exploration and production company reversed early losses on Monday to end up 8 cents, or 2.6%, to $3.13.

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