ISTA reviews revised Valeant bid

January 25, 2012

The board of directors of ISTA Pharmaceuticals Inc. is reviewing a revised non-binding acquisition proposal from Valeant Pharmaceuticals International Inc.

Mississauga, Ontario, Canada, and Irvine, CA-The board of directors of ISTA Pharmaceuticals Inc. is reviewing a revised non-binding acquisition proposal from Valeant Pharmaceuticals International Inc.

On Jan. 17, Valeant increased from $6.50 to $7.50 per share in cash the proposed price of its previously announced offer to acquire ISTA. Valeant also communicated to ISTA that Valeant believed it could achieve a price of up to $8.50 per share, assuming ISTA provides it with selected confirmatory due diligence related to the company. Valeant reaffirmed that its proposal would remain open only until Jan. 31. (ISTA's stock was $8.11 at press time.)

J. Michael Pearson, Valeant chairman and chief executive officer, expressed disappointment in ISTA’s failure to engage fully with Valeant on a timely basis in a letter to the ISTA Board of Directors and Vicente Anido Jr., PhD, ISTA president and chief executive officer.

“We believe that ISTA’s recent stock price rise is attributable to our offer and the possibility of a sale of ISTA and not to the fundamentals of ISTA’s business or projections of future performance,” Pearson wrote. “Our increased proposed price of $7.50 pre-diligence and potential for $8.50 after diligence represent a 94% and 120% premium, respectively, to ISTA’s 60-day volume weighted average price of $3.87 on Dec. 15, 2011, the last trading day before public announcement of our offer. Our offer continues to represent a compelling opportunity for ISTA’s shareholders in light of the continuing challenges facing ISTA.”

“We are pleased with the progression of our strategic review since we embarked on it in mid-December,” Dr. Anido said. “We have invited Valeant, along with a number of other parties, to participate in our process. We are considering Valeant’s revised proposal as part of that process, but we are fully committed to completing the strategic review with the aim of maximizing shareholder value.

“We view Valeant’s willingness to raise its bid at least $2 per share as a clear indication of the inadequacy of its initial proposal,” Dr. Anido added. “Valeant has and continues to be offered the same confidentiality agreement, with no standstill provision, as all the other participants in our process and is subject to the same timeline. We do not think it is in the shareholders’ best interest to abort our process to accommodate Valeant’s artificially short timetable. Meeting Valeant’s demands to shorten the timeline would effectively foreclose the opportunity for a number of other interested parties to compete.”

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