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Valeant shares jump on Bausch & Lomb deal rumor

The Associated Press

NEW YORK (AP) -- Shares of Valeant Pharmaceuticals International Inc. spiked up Friday afternoon after a report said it might soon buy eye care company Bausch & Lomb Inc. Both comments wouldn't comment.

THE SPARK: A Wall Street Journal report published at mid-afternoon Friday said the two companies were close to an agreement for Valeant to buy Bausch & Lomb for about $9 billion.

That's about 2 ½ times the 2012 revenue reported by Valeant, which specializes in dermatology medicines. It also sells a range of brand-name and generic drugs, as well as nonprescription medicines.

The report cited unnamed "people familiar with the matter." Those people reportedly told the Journal a deal could be reached next week, but one said the talks could still collapse.

THE BIG PICTURE: Privately held Bausch & Lomb, based in Rochester, N.Y., announced two months ago that it planned to go public again.

The maker of contact lenses, related eye care products and ophthalmic surgical devices had been taken private in 2007, when private equity firm Warburg Pincus of New York bought the struggling company for $3.67 billion.

That was after Bausch & Lomb had to recall its ReNu with MoistureLoc contact lens solution because it had been linked to dangerous fungal infections. Bausch & Lomb then paid out about $250 million to settle more than 600 lawsuits blaming the MoistureLoc solution for a potentially blinding infection of the cornea, the clear membrane over the pupil and the colored part of the eye.

Bausch & Lomb has since worked to rebuild, most recently with a series of acquisitions. Experts had expected the company to go public again at some point, and that could still happen if it isn't sold.

Last year, Bausch & Lomb narrowed its net loss to $68.3 million, down from a $123.9 million loss in 2011. Revenue rose to $3.04 billion in 2012, from $2.85 billion the year before.

On Friday, spokespeople for Bausch & Lomb, Warburg Pincus and Valeant, which is based in Montreal, Canada, all declined to comment on the rumored deal.

"Our focus remains on building the best global eye health company," Bausch & Lomb spokesman Adam Grossberg wrote in an email response to an inquiry from The Associated Press.

SHARE ACTION: Shares of Valeant jumped $9.80, or 13.1 percent, to $84.47 in trading Friday.