Valeant Hints At Higher Bid For Allergan Inc.

October 21, 2014

By Riley McDermid, BioSpace.com Breaking News Staff

Valeant Pharmaceuticals International, Inc. is willing to raise its bid for Botox maker Allergan as it ups the ante in an increasingly fractious hostile takeover bid, the company told Reuters this week.

Riding high on better-than-expected quarterly profits, Valeant CEO Michael Pearson told the news service that a revised offer could include stock and cash worth more than $200 per share, a jump from its current $176 per share offer. That’s assuming Valeant’s stock continues to rise, of course.

"When people have time to reflect on our performance this quarter, it hopefully goes a long way of convincing the Allergan shareholders that our currency is actually a great stock to own," Pearson told Reuters. "We have some money in our pocket.”

Generic drugmaker Allergan has spent most of this year battling with activist hedge fund investor 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 has 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 have 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.

Allergan declined to comment of the news of an increased bid.