Valeant Pharma plans improved offer for Allergan

May 13, 2014 by The Associated Press

Valeant Pharmaceuticals will not easily accept rejection in its bid to acquire Botox maker Allergan for nearly $46 billion.

A day after Allergan formally turned down the unsolicited offer, Valeant said it will improve that proposal to show its commitment to getting a deal done.

"We are prepared to pay a full and fair price, but consistent with our track record, we will remain financially disciplined," Valeant Chairman and CEO Michael Pearson said Tuesday in a letter to Allergan Inc. shareholders.

Valeant Pharmaceuticals International Inc. plans a May 28 webcast to discuss why it believes its proposal is better than Allergan's plan to remain a stand-alone company. Allergan, based in Irvine, California, hosted its own conference call on Monday and spent more than an hour detailing its growth prospects.

Allergan said that Valeant's uncertain long-term growth prospects and business model create a risk for Allergan shareholders, especially given the stock component of the offer. It also questioned in a letter to Pearson Valeant's cost-cutting plans and whether that would harm the long term viability of its business.

Valeant promised to address concerns raised by Allergan on its own call. It noted that Allergan rejected its bid without discussing it with Valeant.

"On the call, we will discuss why our proposal offers greater short, intermediate, and long-term shareholder value by managing Allergan's assets under Valeant's operating model," Pearson wrote in Tuesday's letter.

Last month, the Canadian drugmaker and activist investor Bill Ackman proposed exchanging each Allergan share for $48.30 in cash and a portion of Valeant's stock.

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

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

Shortly after Valeant and Ackman made their offer public, 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.

Credit Suisse analyst Dr. Vamil Divan said in a research note he expected Valeant to make a more compelling offer to convince most Allergan shareholders "to accept the short-term gains and certainty that the deal provides over the steady long-term share price appreciation that (Allergan) is proposing."

Allergan shares were up more than 2 percent to $161.83 shortly before markets opened.

Explore further: Allergan board turns down Valeant takeover offer (Update)

Related Stories

Allergan board turns down Valeant takeover offer (Update)

May 12, 2014
Botox maker Allergan formally rejected on Monday a takeover bid from Valeant Pharmaceuticals, saying that the unsolicited offer worth nearly $46 billion undervalues the company and poses a significant risk to its growth prospects.

Valeant, Ackman make $45.6B Allergan bid

April 22, 2014
Valeant Pharmaceuticals and activist investor Bill Ackman have unveiled details of their offer to buy Botox maker Allergan, proposing a cash-and-stock deal that could be worth about $45.6 billion.

Botox maker Allergan draws bid from Valeant (Update)

April 21, 2014
Valeant Pharmaceuticals is teaming up with activist investor Bill Ackman in a bid for Botox maker Allergan that could be worth about $40 billion.

Valeant agrees to pay about $2.6B for Medicis

September 3, 2012
(AP)—Valeant Pharmaceuticals International Inc. has agreed to buy dermatology products maker Medicis Pharmaceutical Corp. for about $2.6 billion in cash in a deal to strengthen its position in skin treatments and care.

FDA approves Botox for crow's feet

September 11, 2013
If you have a high school reunion coming up, here's a medical development that you may want to keep an eye on.

Recommended for you

Exploring the potential of human echolocation

June 25, 2017
People who are visually impaired will often use a cane to feel out their surroundings. With training and practice, people can learn to use the pitch, loudness and timbre of echoes from the cane or other sounds to navigate ...

Team eradicates hepatitis C in 10 patients following lifesaving transplants from infected donors

April 30, 2017
Ten patients at Penn Medicine have been cured of the Hepatitis C virus (HCV) following lifesaving kidney transplants from deceased donors who were infected with the disease. The findings point to new strategies for increasing ...

'bench to bedside to bench': Scientists call for closer basic-clinical collaborations

March 24, 2017
In the era of genome sequencing, it's time to update the old "bench-to-bedside" shorthand for how basic research discoveries inform clinical practice, researchers from The Jackson Laboratory (JAX), National Human Genome Research ...

The ethics of tracking athletes' biometric data

January 18, 2017
(Medical Xpress)—Whether it is a FitBit or a heart rate monitor, biometric technologies have become household devices. Professional sports leagues use some of the most technologically advanced biodata tracking systems to ...

Financial ties between researchers and drug industry linked to positive trial results

January 18, 2017
Financial ties between researchers and companies that make the drugs they are studying are independently associated with positive trial results, suggesting bias in the evidence base, concludes a study published by The BMJ ...

Best of Last Year – The top Medical Xpress articles of 2016

December 23, 2016
(Medical Xpress)—It was a big year for research involving overall health issues, starting with a team led by researchers at the UNC School of Medicine and the National Institutes of Health who unearthed more evidence that ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.