Breaking News Bar
updated: 5/12/2014 8:12 AM

Allergan board turns down Valeant takeover offer

hello
Success - Article sent! close
  • Dr. Keith A. Marcus injects Botox between a patient's eyes at the offices of Marcus Facial Plastic Surgery in Redondo Beach, California. Valeant Pharmaceuticals International Inc. offered to buy Allergan Inc., maker of the Botox wrinkle treatment, in a cash-and-stock deal valued at $45.7 billion in the latest step of the Canadian company's plan to become one of the world's largest drugmakers.

      Dr. Keith A. Marcus injects Botox between a patient's eyes at the offices of Marcus Facial Plastic Surgery in Redondo Beach, California. Valeant Pharmaceuticals International Inc. offered to buy Allergan Inc., maker of the Botox wrinkle treatment, in a cash-and-stock deal valued at $45.7 billion in the latest step of the Canadian company's plan to become one of the world's largest drugmakers.
    Bloomberg

 
Associated Press

IRVINE, Calif. -- Botox maker Allergan spurned a takeover bid from Valeant Pharmaceuticals, saying that the unsolicited offer worth nearly $46 billion undervalues the company and carries significant risk.

Shortly after Canada's Valeant and activist investor Bill Ackman made their offer public last month, Allergan announced a so-called poison pill plan, a defensive tactic that makes a buyout prohibitively expensive. Allergan also told Valeant that it didn't want to discuss a tie-up, but said that it would evaluate the offer.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Valeant representatives did not immediately return calls from The Associated Press seeking comment early Monday.

Under the proposed deal, Valeant said that it would exchange each Allergan share for $48.30 in cash and a portion of shares of Valeant Pharmaceuticals International Inc.

Allergan stockholders would own 43 percent of the combined company under that proposal.

Ackman's Pershing Square Capital Management LP -- Allergan's biggest stockholder at 9.7 percent -- agreed to take only stock if the deal went through, and would remain as a long-term shareholder of the combined company.

Allergan said Monday that Valeant's uncertain long-term growth prospects and business model create a risk for Allergan shareholders.

"Valeant's strategy runs counter to Allergan's customer focused approach," Chairman and CEO David Pyott said in a letter to his counterpart at Valeant, Michael Pearson. "In particular, we question how Valeant would achieve the level of cost cuts it is proposing without harming the long term viability and growth trajectory of our business."

Allergan, based in Irvine, has long been considered one of the star performers in the specialty pharmaceutical sector. "Specialty pharmaceutical" is an industry term that differentiates smaller drugmakers from much bigger companies that sell a wide array of drugs, such as Pfizer and Merck.

Shares of Allergan Inc., which hit an all-time high this month, edged 12 cents higher before the opening bell Monday.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here