* Say deal will slash California jobs, tax revenue
* Deal already cleared by FTC
* Shareholders to vote on Sept. 27
(In U.S. dollars unless noted)
By Pav Jordan and Solarina Ho
TORONTO, Sept 24 Two California legislators
have asked U.S. authorities to re-examine a proposed $3.3
billion merger between U.S.-based Valeant Pharmaceuticals
International (VRX.N) and Canada's Biovail Corp BVF.TO, days
before shareholders are to vote on the deal.
In separate letters, assemblymen Kevin de Leon and Jared
Huffman asked the Securities and Exchange Commission and the
U.S. Department of Justice to look again at the deal which has
already received regulatory approvals.
"I implore you to please take action on this matter
immediately to ensure that this proposed merger is in
compliance with the law," Huffman said in his letter, dated
The Valeant-Biovail deal, announced in June, will take
advantage of tax breaks and other savings to create a
Canadian-based company that retains the Valeant name and is
headed by Valeant's existing chief executive, Michael Pearson.
California-based Valeant said earlier this month it planned
to cut about 25 percent of the combined company's U.S. and
Canadian workforce of 4,400 as part of the integration plan.
"With the new company being headquartered in Canada, the
jobs that will be cut will be jobs in the United States," Kevin
de Leon, who represents constituents in north Los Angeles, said
in his letter, also dated Sept. 23. "That alone is worthy of
serious scrutiny from the SEC."
Valeant's chief executive said in a recent letter to
employees that more than $300 million of cost synergies had
been identified in the deal, with more than $200 million in
2011 and the rest captured in 2012.
De Leon and Huffman say in their letters -- written
independently of one another -- that the tax savings represent
lost revenue to the state.
The letters come to light just days ahead of a vote on the
deal on Monday by shareholders, but analysts do not foresee any
obstacles to the transaction.
"This isn't hostile," said William Tanner of Lazard Capital
Markets. "It's something both companies want to get done. I
don't think there's a chance this is not going to happen."
Neither assemblyman was available for immediate comment on
Valeant declined comment on the letters and Biovail could
not be reached for immediate comment.
(Editing by Rob Wilson)