(Reuters) - Canadian drugmaker Valeant Pharmaceuticals International said it has made an unsolicited $5.7 billion bid to buy Cephalon Inc that it expects to finance entirely with debt.
Valeant, formed when Canada's Biovail bought U.S.-based Valeant in September for $3.3 billion and took its name, said it planned to propose a slate of directors to replace Cephalon's board with its own nominees.
The $73-a-share bid represents a 24 percent premium over Cephalon's closing share price of $58.75 on Tuesday, and about a 29 percent premium over the U.S. drugmaker's 30-day trading average.
Cephalon shares rose to $72.89 in extended trading after the Valeant bid was announced. Valeant rose to $49.00 from a close of $44.39 on the New York Stock Exchange.
Valeant said it had made several approaches to Cephalon management and its board about buying the company, but has been disappointed by Cephalon's unwillingness to engage in discussions in a timely manner.
Cephalon has been seen as vulnerable since its founder and longtime chief executive, Frank Baldino, died in December while on medical leave. Baldino was replaced by former Chief Operating Officer Kevin Buchi.
Cephalon did not have an immediate comment on the Valeant announcement.
The company's top-selling sleep disorder drug Provigil is scheduled to lose patent protection next year, and progress in switching patients over to its newer Nuvigil has been slow.
Cephalon, which also sells the cancer drug Treanda and pain medicines, has been on a recent buying spree of its own in an effort to bolster its development pipeline.
On Monday, it offered $231 million to buy Australia's ChemGenex Pharmaceuticals, a week after agreeing to acquire privately held biotechnology company Gemin X for $225 million.
In December, Cephalon acquired a 20 percent stake in Australian stem cell company Mesoblast Ltd.
Valeant, based in Mississauga, Ontario, makes dermatology and neurology products and also sells branded generics.
(Reporting by Bill Berkrot; Additional reporting by Pav Jordan in Toronto; Editing by Richard Chang)