Actavis Plots New Merger Approach For Allergan Inc.
October 8, 2014
By Krystle Vermes, BioSpace.com Breaking News Staff
On Oct. 7, news broke that Actavis was making plans to approach Allergan Inc. about a potential merger. Actavis may connect with Allergan about a deal by the end of this week, according to Reuters.
Valeant Pharmaceuticals International, Inc. has been notably pursuing Allergan, which is known for marketing Botox. However, Allergan has rejected the attempts made by Valeant in recent months.
Some sources who spoke to Reuters claim that Allergan may consider a deal that could increase its value to more than $200 per share. However, there has been no official engagement between Actavis and Allergan as of yet.
Allergan Continues to Fight Off Valeant
Although Allergan may be considering buy-out options from other companies, one that it refuses to work with is Valeant Pharmaceuticals. On Sept. 25, the company issued a news release that reiterated its intentions to stay away from a deal with Valeant and its partner, Pershing Square Capital, despite the persistent attempts.
“We have been very clear in our belief that we can create more value than Valeant's offer and our recent actions have been focused on achieving that goal,” said Allergan’s Board of Directors.
Allergan was also quick to cite its recent growth as proof that the company does not need Valeant to find continued success. Specifically, Allergan stated that it has seen sales and earnings-per-share growth exceed company expectations. The company also unveiled a plan to reduce costs by up to $475 million each year.
“Allergan has taken all of these actions while maintaining its substantial flexibility to deliver even greater value to stockholders,” the Board of Directors stated. “To that end, the company will continue to act in its stockholders' best interests by taking all appropriate steps to accomplish that objective, even in the face of litigation threats made by Pershing Square on September 23, 2014.”
In a more recent statement released by the company on Sept. 29, Allergan’s Board of Directors accused Valeant of undervaluing the company as a whole with its bid.
“Our conclusion that Valeant's offer is grossly inadequate and substantially undervalues Allergan remains unchanged,” the Board stated. “We continue to believe strongly that Valeant's offer does not appropriately reflect the underlying value of Allergan's assets, operations and prospects, including Allergan's industry-leading franchises of global scale and its projected growth opportunities.”
The Board continues to cite company growth and profits as evidence of its significant value, as well as its ability to remain successful under its own power.