Actavis in talks to buy US Botox maker Allergan for around $60 billion: report

Actavis Plc is in talks to buy US Botox maker Allergan Inc for at least $60 billion in a deal that could conclude this month, Bloomberg yesterday reported, citing sources familiar with the matter.

Last week Allergan had said it was in talks with a suitor, without identifying ithe bidder, which was widely speculated as being Actavis. (See: Botox maker Allergan in talks with new suitor ).

Actavis, the world's third-largest generic drugmaker, has offered to pay more than $200 a share, and both companies are trying to narrow a gap of about $3 billion between what Actavis is offering and what Allergan is asking for, the report said.

Allergan, which is fending off a $54-billion hostile takeover from Valeant Pharmaceuticals, is seeking more than $210 a share while Actavis is willing to pay closer to $200, the report added.

Valeant, which has a history of aggressive deal making and has the backing of Allergan's largest shareholder, Bill Ackman's Pershing Square Capital Management, recently said that it was willing to pay at least $200 a share for Allergan. (Valeant Pharmaceuticals plans to raise bid for Allergan)

Allergan wants an agreement with Actavis before its shareholder's meeting on 18 December to vote on Valeant's and Ackman's proposal to remove Allergan directors.

Valeant, Canada's biggest drug maker, had formed a joint venture with activist investor William Ackman's Pershing Square in February this year to acquire a 9.7-per cent stake in Allergan, followed by an unsolicited $45.7-billion cash and stock bid.

After being rebuffed twice, it raised the offer price twice to $54 billion in order to bring Allergan's directors to the negotiating table (Valeant raises offer for the second time this week for Allergan to $53.8 bn).

But Allergan has steadfastly rejected Valeant's offers, which led to Ackman going to court to force a shareholders' meeting on 18 December to vote out a majority of the Allergan board.

Allergan accused Ackman of violating SEC insider trading rules where Ackman's Pershing Square, a large Valeant shareholder, had acquired a huge chunk of Allergan stock before Valeant disclosed its plans to make a bid for the company.

Allergan sought a court injunction to stop Ackman from using his 9.7-per cent stake from voting in the shareholders meeting.

A California court however ruled in Ackman's favour to vote, but ordered that Pershing Square and Valeant disclose details of their agreement and raised serious questions on whether the two violated insider trading rules by buying Allergan shares without publicly disclosing their plans of tabling a bid.

Founded about 60 years ago, Allergan is a global specialty pharmaceutical company whose product range includes ophthalmic pharmaceutical, dermatology and neurological products.

Apart from Botox, Allergan's dry-eye drug Restasis generated about $940 million; its breast-implant business $378 million and $100 million from Latisse, its prescription drug that increases the length of eyelashes.

Allergan, which spends about 17 per cent or about $1 billion a year of its revenue on research and development of new drugs, has 11,400 employees and manufacturing plants in Texas, Ireland, and Costa Rica.

Its sales are projected to grow every year to $9 billion in 2018 from $6.3 billion in 2013, according to the average of analysts' estimates compiled by Bloomberg.

Actavis, the world's third-largest generic drugmaker, changed its name in 2013 after New Jersey-based Watson Pharmaceuticals acquired it for around $5.60 billion in a bid to expand in Europe. (See: Watson Pharmaceuticals to buy Swiss rival Actavis for $5.60 billion)

Actavis has a market value of $64 billion and generated revenue of $8.7 billion last year through its portfolio of generics, branded generics, legacy brands and Over-the-Counter (OTC) products in more than 60 countries.

The company is ranked among the top 3 in 12 global markets, the top 5 in 16 global markets, and in the top 10 in 33 global markets.

Actavis has one of the broadest product portfolios and strongest pipelines in the generics industry. It has more than 750 molecules in 1,700 dosage combinations marketed globally through operations in more than 60 countries and around 40 per cent of its generic drug revenue comes from outside the US.

The company is in leading market positions in key established commercial markets and emerging markets in Central and Eastern Europe, Russia, the UK, France and Australia.

It has 30 manufacturing and distribution facilities around the world, including in China, India, Indonesia and Singapore.