Actavis Agrees To Buy Allergan For $66 Billion
November 17, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
Actavis Plc will buy embattled Botox maker Allergan Inc. for at least $66 billion, or $219 per share in cash and Actavis shares, the company announced Monday. The deal puts an end to a contentious hostile takeover battle for Allergan from rival drugmaker Valeant and values the firm at its highest price point ever.
"Today's transaction provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company," David E. I. Pyott, chairman and CEO of Allergan, said in a statement.
Actavis’s pricing was certainly more attractive: Its bid values Irvine, California-based Allergan at a sharp premium from the $176 per share bid Valeant has been attempting to get Allergan to accept. It is also higher than the $210 per share price tag Allergan had put on itself, a valuation Allergan execs lauded Monday as boon to all stakeholders.
"This combination will greatly enhance our U.S. and international commercial opportunities," said Paul Bisaro, executive chairman of Actavis.
The newly merged firm will be led by Actavis CEO Brent Saunders and Bisaro will remain executive chairman of the board of directors.
For its part, Valeant remained firm in its original bid terms, with CEO J. Michael Pearson saying in a statement that his firm "cannot justify to its own shareholders paying a price of $219 or more per share for Allergan."
Generic drugmaker Allergan has spent most of this year battling with activist hedge fund investor Bill Ackman, a major shareholder in the company, who has been heavily involved in the effort to force Allergan to accept a $53 billion bid for the company from Valeant.
Ackman's $15 billion hedge fund Pershing Square Capital Management is a top shareholder in Valeant, which had been attempting a hostile takeover of Allergan since April. Valeant quickly upped its offer over a series of weeks and eventually launched a tender offer.
Both companies had been using the legal system to force their points. In August, Allergan sued the two companies, alleging their cozy relationship has run afoul of insider trading regulations. Ackman owns 9.7 percent of Allergan, an amount the company has asked a court to disqualify as counting towards a 25 percent shareholder quorum.
Now, however, those machinations will likely stop—although a U.S. Securities and Exchange investigation into whether Valeant and Pershing colluded on stock price may not. Pershing Square did not comment on Monday’s new.