While it is true that Valeant, a Canadian outfit, has shown a true proclivity for bidding into deal spaces, recently -- it has closed very few of those it has set out to hunt down -- and none, in this size range, as far as I can tell.
At (a rumored) more than three times B + L's TTM sales revenue, this would be very rich pricing, indeed. Recall that no one would firmly offer to pay Mr. Hassan's wanted $10 billion price, at the end of last year. Recall also that B + L has spent quite a bit to get ready for an IPO, this Spring.
Knowing Fast Fred as I do, it wouldn't shock me if this is simply a "stalking horse" rumor, to get the IPO fires stoked -- and get potential retail investors in such a planned IPO thinking that the newly public company called B + L (soon to be renamed from the awful WP Prism, Inc.) could at some future point be "flipped" -- at near these valuations. Get 'em hearing the sizzle -- then deliver no steak. . . That's Fred's usual way.
In any event, for what it's worth -- here is a bit of the WSJ piece -- do go read it all:
. . . .Bausch & Lomb, which is owned by private-equity firm Warburg Pincus LLC, could strike a deal to be sold to Valeant next week, the people said. The deal isn't done yet and could still fall apart, one of the people cautioned.Me? I'll be surprised if it does turn out to be true -- certainly, at that $9 billion price. Note that I added the bracketed matter to the quote, to clarify what the writer meant. If the deal falls apart, Fred has now already been able to generate some great (pre-IPO) "quiet period" pump-priming rumors. Normally, rumors a-swirling are no big deal -- but if he uses them to help him flog the stock, prior to SEC granting the IPO an effectiveness order, he's likely to be in some hot water. [I wonder if the SEC will open a jacket on this one, as well -- if such a leak were traced back to B + L, or its bankers, or Warburg Pincus -- that would be a plain violation of about a dozen SEC rules.]
Should that happen [Valeant deal falls apart], Warburg and Bausch & Lomb could proceed with an initial public offering of stock in the eye-care company that had been planned. . . .
Yep -- this looks to me like some cha-cha to help sell the initial public offering of B + L stock, in the next couple of weeks. To be clear, I expect that Valeant is actually in talks, and actually believes it might "win" the deal. I just think Valeant may be serving as Fred's cannon-fodder -- for the IPO. But what do I know?