Valeant Pharmaceuticals plans to raise bid for Allergan
08 Oct 2014
Valeant Pharmaceuticals International Inc is taking its takeover offer for Allergan Inc close to a December shareholder meeting where some of the target's directors faced removal, Bloomberg reported citing a person with knowledge of the matter.
Valeant, which made the hostile bid along with activist investor Bill Ackman's Pershing Square Capital Management LP, plans to sweeten the offer earlier if a rival bidder for Allergan emerged, according to the person who requested anonymity as the information was private.
He added the increase could be around $15 a share. He said no final decision had been made on the amount. The bidders also had not yet decided how the increase would be divided between cash and Valeant's shares.
This would be the third time Valeant has raised its offer for Botox maker Allergan, after its first approach in April, which the latter rejected in May (See: Botox maker Allergan rejects Valeant's $45.7-b hostile bid).
followed by the bid being raised twice within a week (Valeant raises offer for the second time this week for Allergan to $53.8 bn)
Both the bids were rejected and in June Valeant decided to go hostile in June (Valeant starts hostile takeover process for Allergan).
The current offer -- a mix of cash and stock valued the target company at about $176 a share, on the basis of Valeant's closing share price yesterday. At close of trading yesterday Allergan was priced at $186.20, which gave it a market value of about $55 billion.
The earlier offers had been dismissed as ''grossly inadequate,'' by Allergan as it refused to meet with Valeant even as it sought to fend of the approach by striking a deal of its own.
Meanwhile, The New York Times reported that Valeant Pharmaceuticals and Pershing Square Capital Management were planning to raise their offer to acquire the Botox maker Allergan by $15 a share, according to a person with knowledge of the matter.
The increased offer price, to more than $191 a share, or nearly $60 billion in cash and stock, comes as another twist in the year's longest and most contentious takeover battle and could change the thinking at Allergan's board, which was working to strike other deals that would thwart the attempted takeover by Valeant and Pershing Square.
It could also find favour with Allergan shareholders, who were preparing for a special meeting in December at which they would get the chance to vote out a majority of the Allergan board.
Pershing Square had acquired nearly 10 per cent of Allergan shares before the announcement of the offer, which was the first instance of an activist investor and a corporation had joining up for a bid.
