Valeant anticipates needing $6.7 billion of debt for Cephalon bid

By Sara Rosenberg

New York, March 30 - Valeant Pharmaceuticals International Inc. expects that it will need to raise $6.7 billion of new debt to fund its proposed purchase of Cephalon Inc., company officials said in a conference call on Wednesday.

Goldman Sachs & Co. has provided a highly confident letter for the full amount of the financing.

Pro forma for the transaction, leverage would go to 4.1 times from 3.6 times currently. The company's goal would be to pay down debt so that leverage would drop back down to 3.6 times within 12 months of closing, officials said.

As was previously reported, under the proposal, Valeant is offering to buy Cephalon for $73 per share in cash. The transaction is valued at $5.7 billion.

Valeant said that it has made several private approaches to Cephalon's management and board of directors, but has been disappointed by how things have failed to progress. As a result, the offer is now being made public.

In addition, Valeant intends to commence a consent solicitation process during the week of April 4 in an effort to replace Cephalon's current board of directors with its own nominees.

Valeant is a Mississauga, Ont.-based specialty pharmaceutical company. Cephalon is a Frazer, Pa.-based biopharmaceutical company.

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